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China stocks fall as GDP growth cools, property sales drop; HK flat

* SSEC -0.4 pct, CSI300 -0.3 pct, HSI -0.1 pct

* China economy falls slightly in Q3, as expected

* China Sept property sales drop for 1st time in 2-1/2 years

SHANGHAI, Oct 19 (Reuters) - China stocks fell on Thursday after data showed the country's economic growth slowed slightly in the third quarter and property sales fell for the first time in over 2-1/2 years, highlighting the risk of a further cooldown.

While the dip in GDP growth to 6.8 percent from 6.9 percent in the second quarter was in line with economists' forecasts, some investors had bet on a stronger reading after comments by central bank governor Zhou Xiaochuan at the weekend.

Zhou had said growth may hit 7 percent in the second half of this year. nL4N1MR144 3/8

The blue-chip CSI300 index fell 0.3 percent to 3,930.93 points by the end of the morning session, while the Shanghai Composite Index lost 0.4 percent to 3,369.75.

"To some extent, Zhou's comments had disturbed market expectations," said Li Huiyong, economist at Shenwan Hongyuan Securities Co, pointing to a rebound in 10-year treasuries on Thursday following the previous day's sell-off triggered by expectations of higher growth.

While China's full-year 2017 growth should easily beat the government's target of around 6.5 percent, economists believe it will lose momentum next year as property cooling measures and a crackdown on riskier types of lending start to bite.

Markets also remained fixated on the 19th Communist Party Congress, which is expected to see President Xi Jinping tighten his grip on power and the setting of key political and economic priorities for the next five years.

Xi pledged to build a "modern socialist country" for a "new era" in his opening speech to the gathering on Wednesday, but there were few specifics. The meeting ends on Tuesday and details on key economic targets are not expected for months.

Most sectors fell on Thursday, with the property subindex dropping 0.4 percent, and infrastructure stocks falling 0.8 percent.

Other data earlier in the day showed property sales dropped for the first time since March 2015 in September and housing starts slowed sharply. Though property investment picked up, analysts noted it often lags sales trends.

Also on Wednesday, Xi reiterated the government's stance that "houses are built to be inhabited, not for speculation", reinforcing views that authorities' efforts to reduce speculation will continue, according to Rafael Halpin, Head of Research at NSBO Research.

Capital Economics also predicted in a note that "a less supportive fiscal policy stance and slower credit growth should result in a slowdown over the coming months."

The consumer sector bucked the trend, rising 1.6 percent, as retail sales in September grew slightly more than expected.

HONG KONG

Hong Kong stocks were little changed, as Asian stocks hovered around decade highs, buoyed by a sustained rally in global markets.

The Hang Seng index dropped 0.1 percent to 28,674.84, while the Hong Kong China Enterprises Index was unchanged at 11,620.45.

(Reporting by Samuel Shen and John Ruwitch; Editing by Kim Coghill)