(Updates for closing)

SHANGHAI, Dec 20 (Reuters) - China stocks fell on Friday

and registered a second week of losses as investors eyed more

policy tonic from Beijing to shore up the economy.

** At the close, the Shanghai Composite index weakened

0.06% to 3,368.07, while the blue-chip CSI 300 index

lost 0.45%. Both gauges saw a second week of decline.

** The Hang Seng index dropped 0.2% at close, bringing the loss

this week to 1.3%.

** Energy shares led the fall, after state refining

giant Sinopec said China's oil consumption is set to peak by

2027.

** The consumer staples sector lost 0.99% and the

healthcare sub-index lost 0.28%.

** China's policy-triggered bull run that started in late

September has lost steam as economic fundamentals have yet to

turn the corner amid looming U.S. tariff risks.

** China left its benchmark lending rates unchanged as expected

at the monthly fixing on Friday. Persistent deflationary

pressure and tepid credit demand call for more stimulus to aid

the broad economy, but narrowing interest margins on the back of

fast falling yields and a weakening yuan limit the scope for

immediate monetary easing.

** The 2025 budget deficit and mix are more positive than

expected and suggest Beijing is willing to set a high growth

target and record fiscal budget to boost market confidence, but

further policy details are unlikely before March, Morgan Stanley

said in a note.

** Still, the benchmark CSI 300 index has climbed 16% so far

this year and is set to end a three-year losing streak.

** Trading also remains active, especially among smaller

stocks. Outstanding margin trading - a barometer of leveraged

bets - hovered near a nine-year high of 1.87 trillion yuan

($256.21 billion).

** Limiting losses, Chinese technology shares gained after The

Information reported that the U.S. Department of Commerce has

recently asked Nvidia ( NVDA ) to look into how the company's

products ended up in China over the past year.

** The STAR Chip index jumped 3.9%, while an index

tracking China-listed semiconductor companies

surged 3.3%. Tech giants traded in Hong Kong added

0.1%.

($1 = 7.2988 Chinese yuan renminbi)

(Reporting by Shanghai Newsroom; Editing by Mrigank Dhaniwala)