By Summer Zhen
HONG KONG, March 20 (Reuters) - China and Hong Kong stocks fell on Thursday as investors turned wary of short-term volatility after a surge in tech stocks and the Hang Seng Index hitting a three-year high.
At the midday break, the Shanghai Composite index was down 0.07% at 3,424.16 points.
China's blue-chip CSI300 index was down 0.39%, with its financial sector sub-index lower by 0.87%, consumer staples dropping 1.15% and healthcare off 0.39%. Real estate edged up 0.1%.
Hong Kong's benchmark Hang Seng Index declined 1.18% to 24,477.72.
Hong Kong-listed tech giants extended losses, retreating 1.7% by the lunch break.
Hong Kong stocks had accumulated significant gains in the previous session, and, as a result, some investors took profits, which is quite normal, said Kenny Ng, securities strategist at China Everbright Securities International.
The major resistance for the Hang Seng in the short term is 25,000 points, he added.
Index heavyweight Tencent lost 2.6% after the internet giant, late on Wednesday, forecast a "low teens" rise in capital expenditure this year.
The price-to-earnings ratio of the MSCI China Index reached its previous peak of around 12 times and that valuation is unlikely to improve further if economic growth remains weak, BofA Securities analysts said in a note this week.
The smaller Shenzhen index was up 0.21%, the start-up board ChiNext Composite index was weaker by 0.14% and Shanghai's tech-focused STAR50 was down 0.16%.
Additionally, China left benchmark lending rates unchanged after the U.S. Federal Reserve held interest rates.
In Hong Kong, where the local currency is pegged to the U.S. dollar, its de facto central bank warned rates will remain at relatively high levels for some time.
Around the region, iconwin MSCI's Asia ex-Japan stock index was firmer by 0.30% while Japan's Nikkei index was down 0.25%. (Reporting by Summer Zhen, additional reporting by Rae Wee; Editing by Savio D'Souza)