SHANGHAI, July 7 (Reuters) - China stocks fell on Friday dragged down by computer and semiconductor shares, as cautious investors awaited further stimulus from Beijing and signs that could affect Sino-U.S. relations. Hong Kong shares also fell, led by technology stocks.
** China's blue-chip CSI300 Index dropped 0.6% by the lunch break, while the Shanghai Composite Index lost 0.4%. Hong Kong benchmark Hang Seng Index was down 1.0%.
** A-share sentiment edged down this week as market awaits for further stimulus, Morgan Stanley analysts said in a note.
** Stepping up of easing measures, voice of support for the economy from the government and stabilization of geopolitical uncertainty remain drivers of sustainable China equity market recovery, the analysts said.
** Relations between China and the U.S. are still a focus among investors.
** U.S. inspectors have started a fresh round of routine checks on Wall Street-listed Chinese companies' audits in Hong Kong in recent weeks
** Meanwhile, U.S. Treasury Secretary Janet Yellen on Thursday began a four-day visit to China focused on easing tensions between the world's two largest economies, despite low expectations on both sides.
** Volkswagen is monitoring metals markets after China imposed export restrictions on two minor metals used in semiconductors and electric vehicles, it said on Thursday, while some chipmakers played down fears of shortages.
** Chinese semiconductor shares fell 1.4%, while computer stocks tumbled 2.1%.
** Hong Kong-listed mainland banks declined 1.2%, and were down 10.5% for the week so far, on track for their biggest weekly loss since 2018.
** Tech shares were down 2.0%.
(Reporting by Shanghai Newsroom; Editing by Rashmi Aich)
