(Updates to midday)
* Hang Seng Index sheds 1.9 pct, Shanghai slips 0.1 pct
* Xinhua report seen tempering Beijing stimulus expectations
* HSI rolls back gains this week, slips back below key chart level
* Chinese infrastructure, growth-sensitive sectors lead weakness
By Clement Tan
HONG KONG, May 30 (Reuters) - Hong Kong and China shares fell on Wednesday, dragged lower by sectors most sensitive to the Chinese economy after media reports dampened expectations that Beijing is considering another massive stimulus programme.
While China has recently offered small-scale incentives to support certain sectors of the economy, an article on the website of the official Xinhua news agency said that Beijing has no plan to repeat the powerful stimulus used to combat the global credit crisis in 2008, which amounted to some 4 trillion yuan ($630 billion).
Worries over Europe's debt crisis also continued to hurt sentiment, with Spain in focus on fears that efforts to recapilise its ailing banks will add to pressure on its finances. HSBC Holdings Plc, the region's largest bank, slumped 2 percent.
The Hang Seng Index ended the morning session down 1.9 percent, looking set to snap a three-day winning streak. It slipped below the 50 percent Fibonacci retracement of its rise from October 2011 lows to February 2012 highs, at about 18,966 points.
On the mainland, the large cap-focused CSI300 and the Shanghai Composite Index each slipped 0.1 percent, with Chinese energy, resources, infrastructure and banking plays all weaker.
Midday bourse turnover in Hong Kong was at its highest in a week, while trading volume in Shanghai stayed fairly robust depite declining from Tuesday.
Several market sources cited a Xinhua report released after markets closed on Tuesday that said China had no plans for economic stimulus measures this year that are on the scale of those seen in the 2008-2009.
"I don't think we need to be so cynical. Beijing will definitely have to continue to make adjustments, but it won't change its top line rhetoric," said Hong Hao, Bank of Communications International's chief equity strategist.
In Hong Kong, the country's top two lenders, China Construction Bank and Industrial and Commercial Bank of China shed 1.7 and 1.9 percent, respectively, and were among the top drags on the Hang Seng benchmark.
Chinese railway companies, which have surged since Beijing recently announced measures intended to bolster the debt-ridden and scandal-plagued sector, were among the top percentage losers.
China Rail Construction slumped 3.6 percent, and was the top drag on the China Enterprises Index of the top Chinese listings in Hong Kong, which was down 1.9 percent.
Before Wednesday, China Rail Construction had jumped 13.4 percent in the last seven trading sessions. It is still up 43 percent this year, after plunging 54 percent last year, 6 percent in 2010 and 14 percent in 2009.
Bucking broader market weakness on Wednesday, Kweichow Moutai was the top boost in mainland Chinese benchmarks after local media reported that the company expects its revenue to grow 51 percent this year.
Shares of Kweichow Moutai, which produces a premium Chinese liquor popular with the wealthy in the mainland and seen as a status symbol, jumped 1.7 percent on Wednesday, bringing its total gains in 2012 to more than 18 percent.
This compares with the 12.9 percent gain on the CSI300 and the 8.5 percent gain on the Shanghai Composite. While these benchmarks slumped more than 30 percent in 2011 and 2010, Kweichow Moutai has jumped 25 percent. (Editing by Kim Coghill)