(Corrects milestone in headline to 15 months, no change to text)
* SSEC -0.4%, CSI300 -0.1%, HSI 0.6%
* HK->Shanghai Connect daily quota used 2.6%, Shanghai->HK daily quota used 1.5%
* FTSE China A50 +0.3%
SHANGHAI, July 17 (Reuters) - Shanghai shares on Friday were set for their worst weekly drop in 15 months, as China’s better-than-expected GDP data fuelled worries over the pace of policy easing, while foreign investors turned to sell shares after a torrid bull run.
** The CSI300 index was down 0.3% at 4,502.13 points at the end of the morning session, while the Shanghai Composite Index lost 0.5%, to 3,193.82 points.
** For the week, SSEC shed 5.6%, its steepest since April 2019, while CSI300 declined 5.3%, its sharpest retreat since March 2020.
** China stocks posted their biggest fall in more than five months on Thursday, as investors cooled down their buying spree on worries of policy tightening after the country’s economic growth in the second quarter beat expectations.
** “The pace of policy loosening will be slower, as policymakers observe how the job and financial markets perform and decide what steps to take next,” said Zhaopeng Xing, markets economist at ANZ in Shanghai.
** The slump in Moutai shares on Thursday dampened sentiment for other blue-chips, as it’s a bellwether in the strong run-up, raising worries if Beijing would take actions against the liquor-making industry, Yan Kaiwen, an analyst with China Fortune Securities said.
** Moutai’s shares had slumped 7.9%, their worst session since Oct. 29, 2018, after an article by a WeChat account owned by the People’s Daily stated that “Moutai is for drinking, not for speculating”.
** The recent substantial outflows via the Stock Connect quickly curbed sentiment, while SMIC’s Shanghai debut brought a “siphon effect” and led to profit-taking in related tech sectors, analysts at Bohai Securities noted in report.
** However, analysts and fund managers said the slump did not mark the end of the bull run and could offer good opportunities to buy on the dip.
** China Fortune Securities’ Yan said Thursday’s drop was just a short-term correction, and investors do not need to be overly worried about the tightening in Beijing’s monetary policy as there is ample money outside of the A-share market.
** China’s mutual fund industry saw another massive jump in new products and subscriptions in June, suggesting the swift rally in mainland stocks has room to run further.
** In Hong Kong, the Hang Seng index added 0.6% to 25,123.58 points, while the Hong Kong China Enterprises Index gained 0.8% at 10,212.48. (Reporting by Luoyan Liu, Tom Westbrook and Andrew Galbraith, Editing by Sherry Jacob-Phillips)