SHANGHAI, Aug 25 (Reuters) - China and Hong Kong stocks tracked Asian markets lower on Friday, as investors braced for the risk of a hawkish tilt in the U.S. monetary policy, while worries about China's economic health linger.
** Most sectors in China fell but environment protection-related shares stood out on bets they would benefit from Japan's move to discharge treated radioactive water from the wrecked Fukushima nuclear plant into the Pacific Ocean.
** China's bluechip CSI300 Index and the Shanghai Composite Index both fell 0.5% by the lunch break. Hong Kong's Hang Seng Index lost 1%.
** Asian stocks sold off following overnight drop on Wall Street as investors were nervous ahead of Federal Reserve Chair Jerome Powell's speech at Jackson Hole.
** Lingering concerns over China's economic weakness outweighed Beijing's fresh gestures to support sinking stock.
** China's securities watchdog said it had met the country's social security fund as well as big banks and insurers to guide more long-term capital into the stock market.
** The market also ignored news that more listed companies are announcing share buybacks, and that a growing number of brokerages are cutting fees to reduce the cost of trading.
** Morgan Stanley's move to cut its price target for MSCI China also weighed on sentiment.
** The Wall Street bank announced the downgrade a week after it lowered its economic growth forecast for China this year after disappointing data from the world's second-biggest economy.
** It added it expected the pattern of substantial earnings misses versus consensus to continue in the current deflationary macro-economic environment.
** Chinese environment protection stocks, however, rose, as investors expected the sector to benefit from the Fukushima discharge.
** An index tracking environmental stocks rose. GreenTech Environmental Co surged 21%, while Wave Cyber Shanghai Co and CEC Environmental Protection Co jumped more than 12% each. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)
