* Hang Seng down 3.8%, set for biggest fall since March 23
* U.S. Pompeo says ‘significant evidence’ virus emerged from lab
* Hong Kong to report Q1 GDP estimates after market closes
* Mainland markets on holiday; offshore yuan falters
HONG KONG, May 4 (Reuters) - Hong Kong shares dipped the most in six weeks on Monday as rising U.S.-China tensions soured sentiment ahead of the release of the city’s economic growth data for the first quarter, which was marred by the coronavirus outbreak.
** The Hang Seng index fell 3.8% to 23,696.18 by midday, on course for the biggest daily drop in six weeks. The Hang Seng China Enterprises index dropped 4.3%. ** The sub-index of the Hang Seng tracking energy shares lost 6.9%, the financial sector fell 3.7% and the property sector dipped 3.5%.
** U.S. Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the coronavirus emerged from a laboratory in the central Chinese city of Wuhan.
** China’s Global Times, run by the ruling Communist Party’s official People’s Daily, said in an editorial responding to Pompeo’s Sunday interview that he did not have any evidence the virus came from the lab in Wuhan and that he was “bluffing,” calling on the United States to present the evidence.
** Hong Kong shares took much of the heat with mainland China closed for holidays on Monday and Tuesday.
** The offshore yuan fell to a six-week low after U.S. President Donald Trump threatened new tariffs on Beijing as a retaliatory measure for the coronavirus outbreak.
** Hong Kong will publish its GDP estimates for the first quarter on Monday after the stock market closes at 0830 GMT. The government has vowed record budget spending to cushion the economic disruption of the virus.
** “The bottom line is HK is far from perfect but a twin easing by China and the U.S. will boost domestic liquidity conditions under the rules of operating a pegged exchange rate,” Jefferies’ analysts wrote in a note on Monday.
*”From a bottom-up basis, there is a large enough population of dividend growers with acceptable yield and high dividend cover to choose from,” they added.
** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 2.4%, while Japan’s Nikkei index closed down 2.8%.
Reporting by Noah Sin; Editing by Aditya Soni