China, Hong Kong stocks slide as weak data, Mideast war sap risk appetite

(Updates to the midday levels) SHANGHAI, May 18 (Reuters) - Mainland China and Hong Kong stocks slid on Monday as investor focus shifted from U.S.-China talks to escalating tensions in the Middle East and a global bond selloff, while a string of weaker-than-expected activity data also weighed on sentiment. ** At the midday break, the Shanghai Composite Index edged 0.2% lower, while China's blue-chip index CSI300 lost 0.7%. ** Hong Kong's benchmark Hang Seng Index led losses across Asian markets, down 1.4%, mirroring an overnight decline on Wall Street. ** Market sentiment weakened after data showed China's growth lost momentum in April, with industrial output and retail sales both sharply missing expectations as the world's second-largest economy grappled with higher energy costs from the Iran war and persistently weak domestic demand. ** Fresh attacks in the Gulf pushed oil prices and bond yields higher, further dampening investors' risk appetite. ** A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia said it intercepted three drones. U.S. President Donald Trump also warned Iran to move "fast" on a deal. ** Investors are increasingly concerned that central banks may tighten policy further to contain inflation pressures, overshadowing the Trump-Xi summit, which produced limited concrete outcomes. ** "In our view, the summit delivered short-term stabilization for both leaders," Nomura economist Lu Ting said, referring to a new paradigm described by Washington as a pragmatic arrangement and by Beijing as a "Constructive Strategic Stability U.S.-China Relationship". ** "We believe the summit is overall a success, though it might disappoint some people that had too high expectations right before the summit." ** China-listed agriculture stocks fell more than 2% after the White House said Beijing committed to buying at least $17 billion worth of U.S. agricultural products annually from 2026 to 2028. ** In contrast, Chinese chipmakers rose after U.S. officials indicated during the two-day summit in Beijing last week that semiconductor export controls were not a key issue, suggesting any breakthrough on Nvidia's ( NVDA ) H200 chip sales to China remains distant. ** A sub-index tracking consumer staples dropped 1.5%.