China, Hong Kong stocks drop as trade data points to weak domestic demand

(Updates to market close) SHANGHAI, May 9 (Reuters) - Chinese and Hong Kong stocks declined on Tuesday, as investor sentiment was dampened after trade data pointed to weak domestic demand, while a rally of financial shares in the morning session waned in late trade.
** China's blue-chip CSI300 Index closed down 0.9%, while the Shanghai Composite Index lost 1.1%.
** Hong Kong's benchmark Hang Seng Index was down 2.1%, while the China Enterprises Index tumbled 2.4%, both logging the worst daily performance in nearly two months.
** China's imports contracted sharply in April, while exports grew at a slower pace, reinforcing signs of feeble domestic demand despite the lifting of COVID curbs and heaping pressure on an economy already struggling in the face of cooling global growth.
** UBS analysts wrote in a note that imports data fell more than expected, indicating domestic demand remains weak despite policy support.
** Iris Pang, Chief Economist of Greater China at ING, said that weak import data overshadowed positive export growth in April.
** "The positive growth in exports, however, mainly a result of the low base from last year's COVID-19 lockdown," she said.
** "The notable slowdown in exports confirms our skepticism about the sustainability of the export rebound," said analysts at Barclays, adding that they expect exports to continue to weaken in coming months.
** Financial stocks, which were leading gains in the morning session and past few days, lost momentum in late trade. Ping An Insurance Group Co of China Ltd lost 2.6%.
** Meanwhile, China International Capital Corp Ltd jumped 10%, hitting the daily upper circuit limit, while China Galaxy Securities Co Ltd climbed 9.3%.
** In Hong Kong, tech stocks tumbled 3.0%, with Tencent , Alibaba , and Meituan down 3.6%, 3.1%, and 2.9%, respectively. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich and Varun H K)