* SSEC -0.5%, CSI300 -0.6%, HSI -0.6% * HK->Shanghai Connect daily quota used 3.2%, Shanghai->HK daily quota used 2.6% * FTSE China A50 -0.3% SHANGHAI, July 6(Reuters) - China stocks dropped on Tuesday, with the blue-chip index hitting a near two-month low, as healthcare firms tumbled on worries over lofty valuations. ** The CSI300 index fell 0.6% to 5,055.65 at the end of the morning session, while the Shanghai Composite Index lost 0.5% to 3,515.64. ** Falling the most, the CSI300 healthcare index slumped 5.1%, on track for its worst day since March 8. ** Hangzhou Tigermed Consulting Co Ltd dropped 14.2%, while Shanghai Fosun Pharmaceutical Group Co Ltd , Aier Eye Hospital Group Co Ltd, Beijing Tongrentang Co Ltd and Wuxi AppTec Co Ltd retreated between 7.2% and 10%. ** “The growth rates of many healthcare firms could not support their current high valuations,” said Yan Kaiwen, an analyst with China Fortune Securities. ** Yan said some investors shifted to cheaper sectors with stable growth, including developers. ** The CSI300 real estate index rose 3.4%, with bellwether Vanke up also 3.4%. ** In Hong Kong, the Hang Seng index dropped 0.6% to 27,980.23, while the Hong Kong China Enterprises Index lost 0.4%, to 10,232.91. ** The Hang Seng tech index extended declines to fall 1.4%, as antitrust worries persisted. ** China’s antitrust regulator is set to formally block Tencent Holdings Ltd’s plan to merge the country’s top two videogame streaming sites, Huya and DouYu, three people familiar with the matter told Reuters. ** Tencent edged up 0.5%. ** Hong Kong leader Carrie Lam said on Tuesday “ideologies” posed risks to national security and urged parents, teachers and religious leaders to observe the behaviour of teenagers and report those who break the law to the authorities. (Reporting by Luoyan Liu and Andrew Galbraith; editing by Uttaresh.V) Our Standards: The Thomson Reuters Trust Principles.