* SSEC -0.4 pct, CSI300 -0.2 pct, HSI -0.7 pct
* China c.bank tightens scrutiny over shadow banking business
* resources shares fall; health and liquor stocks firm
SHANGHAI, Oct 26 (Reuters) - China stocks fell on Wednesday morning on lingering concerns over tighter liquidity, with a correction in resources shares offsetting strength in the healthcare and liquor sector.
The Hong Kong market - more exposed to offshore funds than mainland markets - followed Wall Street lower, weighed down also by energy shares, as oil prices extended this week’s losses.
China’s CSI300 index fell 0.2 percent, to 3,360.28 points at the end of the morning session, while the Shanghai Composite Index lost 0.4 percent, to 3,120.93 points.
Although yuan depreciation anxiety eased on Wednesday - the yuan is set to rise against the U.S. dollar for the first time in five days - there are concerns about tighter liquidity as China’s 10-year treasury yields are poised to rise for the third day.
The weakness in bond prices is partly linked to news of tighter regulatory scrutiny over bank’s wealth management products - a major source of funding for the bond market.
China’s central bank will take into account off-balance sheet financing at commercial banks to assess their overall financial health, three sources told Reuters.
Coal miners pulled back after strong rallies recently on the back of higher coal prices. Energy shares also dropped.
But an index tracking the healthcare industry was firm on hopes earnings will pick up after Beijing published a blue-print for the industry with the aim of growing the sector to 16 trillion yuan ($2.36 trillion)by 2030.
China’s liquor stocks also rallied as the sector is seen benefiting from price hikes in their products.
In Hong Kong, the Hang Seng index dropped 0.7 percent, to 23,402.69 points, while the Hong Kong China Enterprises Index lost 1.1 percent, to 9,733.84.
Global investors remained nervous given the U.S. election next month, the Federal Reserve’s policy meeting in December, and over the health of China’s economy.
Samuel Shen and John Ruwitch; Editing by Shri Navaratnam