Shanghai shares set for biggest weekly drop in eight on Sino-U.S. tensions

* SSEC -0.2%, CSI300 -0.2%, HSI +0.4%

* Shanghai shares set for biggest weekly drop since mid-July

* Defence shares drop as Sino-India tensions ease

SHANGHAI, Sept 11 (Reuters) - Chinese shares edged lower on Friday, with the benchmark Shanghai Composite Index on track for its biggest weekly loss in eight on concerns over simmering Sino-U.S. tensions. ** At the midday break, the Shanghai Composite index was down 0.21% to 3,228.01. The index has lost 3.8% this week so far, on track for its steepest loss since mid-July. ** China’s blue-chip CSI300 index was down 0.15% on Friday and 4.1% for the week. ** The CSI financial sector sub-index fell 0.75%, the consumer staples sector lost 0.14% and real estate firms shed 1.42%. ** U.S. President Donald Trump said on Thursday the deadline set for Chinese company ByteDance to sell its popular short-video app TikTok’s U.S. assets would not be extended. ** Chinese H-shares listed in Hong Kong rose 0.27% to 9,709.84, while the Hang Seng Index was up 0.42% at 24,416.33. ** The smaller Shenzhen index was up 0.11%, the start-up board ChiNext Composite index was higher by 0.56% and Shanghai’s tech-focused STAR50 index was up 0.49%. ** Defence shares fell after India and China issued a joint statement that they have agreed that both countries’ troops must quickly disengage from a border standoff. The National Defense Industry Index declined 1.55%. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.04%, while Japan’s Nikkei index was up 0.57%. ** The yuan was quoted at 6.8388 per U.S. dollar, 0.07% weaker than the previous close of 6.8338. ** So far this year, the Shanghai stock index is up 5.8% and the CSI300 has risen 11.7%, while China’s H-share index listed in Hong Kong is down 13.1%. Shanghai stocks have declined 4.94% this month. (Reporting by Andrew Galbraith; Editing by Subhranshu Sahu)