Wires

China stocks fall most in six weeks as tech shares retreat

SHANGHAI, Dec 23 (Reuters) - China stocks on Monday posted their worst single-day drop in six weeks, weighed down by a correction in tech shares after a state fund announced plans to cut its stakes in some of these companies, while focus remained on the Sino-U.S. trade deal.

** The blue-chip CSI300 index fell 1.3% to 3,967.10, while the Shanghai Composite Index dropped 1.4% to 2,962.75, both their steepest drop since Nov. 11.

** The National Integrated Circuitry Investment Fund, also known as the "Big Fund", planned to cut its stakes in Gigadevice Semiconductor 603501.SS, chipmaker Shenzhen Goodix Technology 603160.SS and Hunan Goke Microelectronics 300672.SZ by about one percentage point each, according to those companies' statements.

** These three stocks as well as the broader tech sector came under pressure after the announcement.

** The CSI IT index and CSI telecoms services index sank 2.6% and 2.9%, respectively.

** The strong gains in China's growth stocks this year have more than factored in most of the expectations for their earnings in next two to three years, Luo Kun, an analyst with Fortune Securities, wrote in a report.

** For the short-term, the A-share market is expected to consolidate recent gains while awaiting for new upward momentum following the Sino-U.S. trade deal, Luo added.

** Leading brokerage China Merchants Securities noted the state fund's plan could dent market sentiment for the short-term, though China's long-term support for tech sector will remain intact.

** Foreigners have spent a record 190 billion yuan ($27.11 billion) via the Stock Connect so far in 2019 purchasing shares listed on the tech-heavy Shenzhen Stock Exchange.

** They bought China's A-shares via the Stock Connect for the 28th session on Monday, the longest buying spell this year.

** U.S. President Donald Trump on Saturday said the United States and China would "very shortly" sign their so-called Phase One trade pact.

** China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.05% while Japan's Nikkei index was up 0.02%.

** The yuan was quoted at 7.011 per U.S. dollar, 0.06% weaker than the previous close of 7.0065.

** At 0709 GMT, China's A-shares were trading at a premium of 24.96% over the Hong Kong-listed H-shares. ($1 = 7.0095 Chinese yuan renminbi) (Reporting by Luoyan Liu and Brenda Goh; Editing by Rashmi Aich)