SHANGHAI: China and Hong Kong stocks fell on Thursday, tracking regional markets lower as investors digested the implications of policymakers in major economies preferring to take a patient approach to monetary easing amid sticky inflation.

Geopolitical tensions also kept investors nervous as China's military started two days of "punishment" drills held in five areas around Taiwan just days after Taiwan President Lai Ching-te took office.

More hawkish-than-expected minutes of the Federal Reserve's latest policy meeting, a hot UK inflation print and a sobering assessment of New Zealand's inflation problems from the country's central bank have caused investors to pare their bets of the pace and scale of global rate cuts expected this year.

China's central bank has guided some commercial banks to accelerate the pace of lending in May, four sources with knowledge of the matter said, after broad credit growth in April hit a record low.

At the midday break, the Shanghai Composite index was down 1 per cent at 3,126.82 points.

China's blue-chip CSI300 index was down 0.89 per cent, with its financial sector sub-index lower by 0.94 per cent, the consumer staples sector down 0.67 per cent, the real estate index down 3.33 per cent and the healthcare sub-index down 0.78 per cent.

Chinese H-shares listed in Hong Kong fell 1.45 per cent to 6,719.13, while the Hang Seng Index was down 1.38 per cent at 18,930.02.

The smaller Shenzhen index was down 1.29 per cent, the start-up board ChiNext Composite index was weaker by 0.98 per cent and Shanghai's tech-focused STAR50 index was down 1.07 per cent​.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.22 per cent while Japan's Nikkei index was up 1.18 per cent.

Shares in property developers slumped 3.3 per cent, and non-ferrous metal lost 2.9 per cent.

Tech giants listed in Hong Kong fell 1.7 per cent.

 - Reuters