Updates to market close

By Summer Zhen

HONG KONG, April 1 (Reuters) - China and Hong Kong stocks pared early gains to end slightly higher on Tuesday, as optimism over the latest Chinese manufacturing activity data hitting a four-month high was partially countered by new tariff concerns and a sell-off in Xiaomi.

** The Shanghai Composite index .SSEC added 0.38% to close at 3,348.44 and China's blue-chip CSI300 index .CSI300 was flat. Both narrowed gains from midday.

** Healthcare stocks .CSI300HC jumped 3% to lead the gain, while the defence sector .CSI399973 climbed 1.9% after China launched military drills around Taiwan.

** China's factory activity expanded at its fastest pace in four months in March, buoyed by stronger demand and robust export orders, a private-sector survey showed.

** The data broadly aligned with the official PMI data released on Monday that showed manufacturing activity growing at its quickest rate in a year in March.

** Hong Kong's Hang Seng index .HSI rose 0.38% to 23,206.84.

** The Hang Seng Tech Index .HSTECH added 0.2%, giving up most of the early gains.

** Tech major Xiaomi 1810.HK fell more than 5% after the company said it was actively cooperating with the police on a fatal accident involving an SU7 electric vehicle.

** While PMI data suggested improved activity in the manufacturing sector, rising uncertainties with additional trade barriers may weigh on data in the coming months, Goldman Sachs analysts said.

** All eyes are on the upcoming U.S. reciprocal tariff announcement on Wednesday, which President Donald Trump said will target all countries.

** Analysts said it is uncertain whether China's policy stimulus will be sufficient and delivered in time to offset further tariff pressure.

** The smaller Shenzhen index .SZSC ended 0.35% higher and start-up board ChiNext Composite index .CNT eased 0.09%.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS firmed 0.85%, while Japan's Nikkei index .N225 closed up 0.02%.

(Reporting by Summer Zhen; Editing by Rashmi Aich and Sumana Nandy)

((summer.zhen@thomsonreuters.com; 852-3462-7739;))