* SSEC -0.7%, CSI300 -0.8%, HSI -1.7%

* HK->Shanghai Connect daily quota used -1.7%, Shanghai->HK daily quota used 2.8%

* FTSE China A50 -0.9%

SHANGHAI, Dec 7 (Reuters) – China and Hong Kong stocks fell on Monday, dragged down by financials, due to worries over heightened Sino-U.S. tensions, though upbeat trade data narrowed losses.

** The CSI300 index fell 0.8% to 5,026.10 at the end of the morning session, while the Shanghai Composite Index lost 0.7% to 3,421.85.

** The Hang Seng index dropped 1.7% to 26,382.06, while the Hong Kong China Enterprises Index lost 1.8% to 10,437.22, after sliding 2.2% and 2.3%, respectively.

** Leading the decline, the CSI300 banks index dropped 2.6%, while the Hang Seng financials index 2.2% by midday break, on track for its worst session since Oct. 30.

** The United States is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong, according to three sources, including a U.S. official, familiar with the matter.

** The news came after the United States on Thursday added China’s top chipmaker, SMIC, and oil giant CNOOC to a blacklist of alleged Chinese military companies.

** “People just started to think the targets of the U.S. sanctions would be Chinese banks or financial institutions,” said Steven Leung, executive director at UOB Kay Hian.

** He said investors also booked some profits following a sharp rally in financial companies in the past month.

** The Hang Seng financials index had risen 15% in November, buoyed by China’s continued economic recovery and upbeat vaccine progress.

** But losses were contained after customs data showed that China’s exports in November rose 21.1% from a year earlier, after 11.4% growth in October, while imports grew 4.5% last month from a 4.7% expansion in October.

** Analysts polled by Reuters had forecast export growth of 12.0% in November from a year earlier and import growth of 6.1%. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Rashmi Aich)