Hong Kong shares slide, China off 2-week highs on tepid surveys
* HSI -2.1 pct, H-shares -3.0 pct, CSI300 -2.4 pct
* China banking, coal sectors under heavy selling pressure
* Construction-related plays sink after China services PMI
* Daphne plunge 10 percent to lowest in almost 2 years
HONG KONG, July 3 (Reuters) - China shares were knocked off a two-week high on Wednesday, pulling down Hong Kong markets, with financial and material counters under heavy selling pressure in a retracement of last week's strong rebound.
Two surveys showing a subdued China's non-manufacturing sector discouraged investors. Slowing construction activity was cited for a weak official services PMI reading, while new orders for a similar private survey sank to a 55-month low.
At 0315 GMT, the CSI300 of the leading Shanghai and Shenzhen A-share listings was down 2.4 percent, while the Shanghai Composite Index was down 2 percent. Both had closed on Tuesday at their highest since June 21.
The Hang Seng Index was down 2.1 percent at 20,233.7, slipping further from Friday's more than one-week high. The China Enterprises Index of the top Chinese listings in Hong Kong dived 3 percent.
"It's been very tough telling clients to start looking at a tradeable rebound, it shows everybody is very pessimistic right now," said Hong Hao, chief strategist at Bank of Communication International Securities.
"Let's not talk about a complete reversal, but there's definitely a meaningful rebound coming up after the steep losses and the high percentage of short selling," Hong added, suggesting clients focus on sectors such as internet businesses that offer good potential and are not capital intensive.
The internet sector is among those cited.
On Wednesday, Tencent Holdings was among the few Hang Seng Index components to see gains, up 0.7 percent.
Construction-related counters sank as China's official purchasing managers' index for the services sector sank to its weakest in nine months.
The HSBC/Markit Purchasing Managers' Index (PMI) for the services industry inched up to 51.3 last month from May's 51.2, as growth in new orders hit a 55-month low and business confidence slumped to depths last seen in late 2005 when records began.
China State Construction tumbled 3.4 percent in Hong Kong and 3.1 percent in Shanghai. China Vanke, the country's largest property developer by sales, was down nearly 5 percent in Shenzhen.
With the services sector accounting for nearly half of China's economy, Wednesday's data readings shook already fragile sentiment hard hit by the cash crunch in the mainland last month.
Coal producers China Coal and China Shenhua each tumbled more than 5 percent in Hong Kong, while Chinese banks were among the leading index drags. Industrial and Commercial Bank of China (ICBC) dived 3.2 percent in Hong Kong and 2.2 percent in Shanghai.
Retail counters were also hit after data showed the value of Hong Kong retail sales grew in May by 12.8 percent from a year earlier, weaker than April's 20.7 percent growth.
Daphne International plunged nearly 10 percent to its lowest in almost two years. Shoe retailer Belle International slid 4.2 percent to its lowest in three years.