* SSEC -1.0%, CSI300 -1.3%, HSI -0.8% * HK->Shanghai Connect daily quota used -3.4%, Shanghai->HK daily quota used 0.8% * FTSE China A50 -1.5% SHANGHAI, June 29 (Reuters) - China stocks fell on Tuesday as investors booked profit after a rally, with financial and consumer firms leading the retreat. ** The CSI300 index fell 1.3% to 5,185.65 by the end of the morning session, while the Shanghai Composite Index lost 1.0% to 3,572.27. ** The retreat came after the blue-chip CSI300 index rose for the fifth straight session on Monday. ** The CSI300 financials index declined 1.3%, while the CSI300 consumer staples index dropped 2.1%. ** China will make its monetary policy flexible, targeted and appropriate, while keeping interbank liquidity reasonable, the central bank said on Monday, as authorities seek to consolidate a post-COVID-19 economic recovery. ** China’s economy has staged a strong rebound from the impact of the COVID-19 pandemic, with Chinese exporters racing ahead to fill global demand bolstering the vast industry sector, but the recovery in the consumer end has been weak. ** “The net injection by the PBOC was to smooth liquidity across quarters and the PBOC would probably go back to drain short-term liquidity, while large inflows via the Stock Connect are unsustainable against a backdrop of a stronger dollar,” said Yan Kaiwen, an analyst with China Fortune Securities. ** Yan said it’s a bull market for growth stocks driven mainly by loose liquidity, and any signs of change in liquidity conditions could lead to large fluctuations in the market. ** Shares in China’s leading battery maker CATL hit an all-time high, after the company extended a battery supply deal with Tesla Inc to 2025. ** According to Refinitiv data, investors via the Stock Connect linking mainland and Hong Kong sold net 2.6 billion yuan ($402.46 million) worth of A-shares on Tuesday. ** The Hang Seng index dropped 0.8% to 29,043.02, while the Hong Kong China Enterprises Index lost 1.0% to 10,754.19. ($1 = 6.4603 Chinese yuan) (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.