China and Hong Kong stocks dropped on Friday, as investor sentiment remained subdued amid a lack of concrete stimulus to boost consumption and support a troubled real estate sector.

** China's blue-chip CSI300 Index was down 0.3% by lunch break, while the Shanghai Composite Index lost 0.1%. Hong Kong's benchmark Hang Seng Index was down 1.1%.

** Data for July and policy announcements this week have disappointed investors, who were expecting stronger policy measures than just a rate cut.

** Foreign capital was on track to record a net outflow via the northbound trading link for the 10th consecutive session. This week has seen more than 20 billion yuan ($2.75 billion)capital outflow so far.

** Hang Seng Index was set for its biggest weekly loss in two months.

** Two pain points in China's growth recovery highlighted by July activity data are the real estate sector and stalled consumption recovery amid rising unemployment, analysts at Barclays said in a note.

** China Evergrande, which is the world's most heavily indebted property developer and became the poster child for China's property crisis, on Thursday filed for protection from creditors in a U.S. bankruptcy court.

** Meanwhile, Country Garden's liquidity crisis has stirred up fears among other developers.

** Shares of Longfor, which is considered one of the most resilient private developers, have shed 30% from its peak in July.

** Tech stocks listed in Hong Kong extended their downtrend with a 2.6% drop.

** Performances of China's securities stocks were seen divergent. Industry leaders such as China International Capital Corporation (CICC) and Huatai Securities were rising while most other firms were declining.

($1 = 7.2824 Chinese yuan) (Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)