* SSEC closes down 0.6% at 3,361.59 points, CSI300 up 0.2%, * Shanghai index notches lowest close since March 10 * Yuan, Chinese government bonds stable * Yuan traders shift focus to U.S. Fed meeting * State-owned papers urge calm after rout (Updates to China close) SHANGHAI, July 28 (Reuters) - Shanghai shares fell on Wednesday but trimmed earlier losses in volatile trade as Chinese state-run media called for calm following a wild rout triggered by investors’ concerns about tightening government regulation. The sharp sell-off has unsettled global markets as well as volatility spiked. The Shanghai Composite Index fell as much as 2% before ending the day down 0.6%, its lowest close since March 10. The blue-chip CSI300 index clawed back from losses to end up 0.2%, but was still down about 6.5% for the week. In Hong Kong, the benchmark Hang Seng Index shook off losses to rise more than 1% in afternoon trade after plunging to an eight-month closing low a day earlier. The Hang Seng China Enterprises Index was up nearly 2%. Andy Maynard, head of equities at China Renaissance in Hong Kong, said the market mood on Wednesday was “nervous” rather than panicked. “Is the downside over? No it’s not. Do we think there’s going to be more? Yes, there probably is. Do I think there’s some relief here? Yes.” Health care firms were among the day’s winners after tumbling more than 15% over the previous four sessions on fears the sector may be regulators’ next target. A sub-index of the CSI300 tracking the sector rose 2.66%. The Hang Seng Tech index, which hit record lows a day earlier, gained 2.05% as of 0717 GMT. Real estate firms in Hong Kong rose 1.13% even as a mainland index tracking the sector fell 0.42%. A CSI index tracking education firms listed on mainland and Hong Kong markets was marginally higher by 0.21%. The wobbly trade in Chinese markets came as a state-owned securities newspaper urged A-share investors to stay calm. The Securities Times wrote the market “will stabilise at any moment” after regulatory moves aimed at the education, property and technology sectors sparked heavy selling this week. Foreign buying helped to steady A-shares on Wednesday, with Refinitiv data showing a resumption of robust net inflows into Chinese shares through the Northbound leg of the Stock Connect scheme But mainland investors remained net sellers of shares in Hong Kong through the Southbound Stock Connect, Refinitiv data showed. FED FOCUS Fixed income and foreign exchange markets were relatively steady on Wednesday after succumbing to Tuesday’s sell-off. The most-traded 10-year Chinese government bond futures, for September delivery, fell 0.1%, following a 0.35% drop a day earlier. The yuan firmed from a more than three-month trough against the dollar hit a day earlier, as some investors expected major state banks could step in soon to support the currency. The yuan’s late slump fed into the People’s Bank of China’s weakest daily fixing in three months on Wednesday. Some traders said much attention had shifted from domestic markets to the outcome of a two-day U.S. Federal Reserve meeting due later in the session, which could affect the trajectory of the dollar and other major currencies. “Maybe the authorities want some weakness in the yuan for the time being, but an overshoot could definitely prompt some actions,” said a trader at a Chinese bank. The onshore spot yuan was last at 6.5043 per dollar and the offshore yuan strengthened to 6.5124 per dollar. “We believe that the risk for CNY is firmly on the downside,” said Wee-Khoon Chong, senior markets strategist for APAC at BNY Mellon. “Ongoing regulatory uncertainties, slowing growth concerns in China and equity indices falling into year-to-date negative territory will heighten retail funds redemption pressure and lead to a reduction of risk exposure by institutional investors.” Reporting by Andrew Galbraith and Winni Zhou; Editing by Sam Holmes and Kim Coghill Our Standards: The Thomson Reuters Trust Principles.