China stocks fell on Thursday morning, with investor confidence remaining weak amid signs of factory activity slowing under pressure from the trade spat with the United States.

The CSI300 index fell 0.8 per cent, to 3,360.92 points, at the end of the morning session, while the Shanghai Composite Index lost 0.8 per cent, to 2,746.85 points.

Activity in China's vast factory sector likely slowed for the third straight month in August as domestic demand remained weak and exporters faced rising uncertainties from the escalating trade war with the United States, a Reuters poll showed.

“Investors are relatively pessimistic and cautious for now amid low levels of trading volume, as there are still concerns over the development of Sino-U.S. trade spat,” said Yan Kaiwen, an analyst with China Fortune Securities.

The Hang Seng index dropped 0.6 per cent, to 28,242.62 points, while the Hong Kong China Enterprises Index lost 0.6 percent, to 11,015.17. China's CSI300 financial sector sub-index was lower 0.55 per cent, the consumer staples sector down 0.3 per cent, the real estate index down 0.42 per cent and the healthcare sub-index down 0.95 per cent.

The smaller Shenzhen index was down 1.18 per cent and the start-up board ChiNext Composite index was weaker by 1.42 per cent. Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.19 per cent, while Japan's Nikkei index was up 0.11 per cent.

The yuan was quoted at 6.8305 per US dollar, 0.15 per cent weaker than the previous close of 6.8205. The price-to-earnings ratio of the Shanghai index was 11.78 as of the last full trading day, while the dividend yield was 2.7 per cent.

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