China stocks wobble on looming Sino-US trade talks; HK shares flat

HONG KONG, May 9 (Reuters) - China and Hong Kong stocks struggled to gain traction on Friday, trimming the week's rise, as investors awaited the upcoming trade talks between the world's two largest economies.

At the midday break, the Shanghai Composite index declined 0.3% to 3,343.38 points and the blue-chip CSI300 index weakened 0.2% after trading in a narrow range in the morning session.

Hong Kong's benchmark Hang Seng Index was little changed, hovering near a five-week high.

China has full confidence in its ability to manage U.S. trade issues, 인터넷가입 its Vice Foreign Minister Hua Chunying said, a day before trade talks with U.S. officials are set to begin in Switzerland.

On Thursday, U.S. President Donald Trump said he expects substantive negotiations between the world's two largest economies, signalling that the punitive 145% U.S. tariffs on Chinese goods may come down.

"Tariff de-escalation, if it materializes, would serve as a major positive for Chinese equities. However, we think the negotiation process could be lengthy, with ups and downs," Morgan Stanley analysts, including Laura Wang, said.

"We advise a balanced portfolio with high-quality, large-cap offshore internet names and A-share blue-chip consumer names."

China's leading chipmaker, Hua Hong Semiconductor , dragged on the market, tumbling more than 10% after reporting a drop in earnings in the last quarter.

Semiconductor Manufacturing International Corporation also weakened. The chip sector sub-index lost 2.8%.

Still, the CSI 300 Index climbed 1.9% so far this week, its best performance in three months, as Beijing's easing measures ahead of the trade talks offered some respite.

Meanwhile, the Hang Seng Index was set to advance for the fourth week in its longest winning streak since February, when Chinese AI startup DeepSeek stunned investors and triggered a tech rally.

China saw a faster-than-expected rise in its April exports, while imports narrowed their fall, customs data showed, offering some relief ahead of the tariff talks this weekend. (Reporting by Jiaxing Li in Hong Kong; Editing by Sumana Nandy)