* SSEC -1.6%, CSI300 -2.7%, HSI -2.6%
* HK->Shanghai Connect daily quota used -3.2%, Shanghai->HK daily quota used 3%
* FTSE China A50 -2.7%
BEIJING/SHANGHAI, March 4 (Reuters) - Chinese shares fell on Thursday, weighed down by consumer and material firms, as the benchmark index reversed course a day after its biggest gain in three weeks. ** At the midday break, the Shanghai Composite index was down 1.58% at 3,520.24, while the blue-chip CSI300 index was down 2.68%. ** The bluechip's consumer staples sub-index slid 4.79%, while the material sub-index fell 4.41%. ** Tech shares were also sold off by the mid-day break, with the start-up board ChiNext Composite index falling 4.24% and Shanghai's tech-focused STAR50 index was down 2.03%. ** Investors are rotating out of consumer, new energy and tech shares due to valuation concerns, and adding positions in undervalued property, banking and insurance stocks, said Yang Delong, investment manager at First Seafront Fund Management Co. ** "Growing mutual fund redemptions amid market declines also worsen the sentiment, it's not easy to turn it around," said Zhang Qi, analyst with Haitong Securities Co. ** The smaller Shenzhen index was down 2.96%. ** Chinese equities have come under pressure on worries around policy tightening, and investors now eye the parliamentary session that will chart a course for economic recovery and unveil a five-year plan to fight stagnation. ** Chinese H-shares listed in Hong Kong fell 2.81% to 11,337.87, while the Hang Seng Index was down 2.55% at 29,118.30. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 2.28% while Japan's Nikkei index was down 2.80%.
(Cheng Leng in Beijing and Andrew Galbraith in Shanghai; Editing by Rashmi Aich)
