SHANGHAI, June 13 (Reuters) - China stocks recouped early losses on Tuesday after the central bank lowered a short-term policy lending rate in a bid to restore market confidence, although economic worries and geopolitical risks limited gains.

** China's blue-chip CSI300 Index edged up 0.1% by the lunch break, while the Shanghai Composite Index was roughly flat.

** In Hong Kong, the benchmark Hang Seng Index and the China Enterprises Index added 0.4% each.

** The People's Bank of China (PBOC) cut its seven-day reverse repo rate by 10 basis points to 1.90% from 2% on Tuesday, in a bid to restore market confidence and prop up a stalling post-pandemic recovery. It's the first time the PBOC cut its short-term lending rates in 10 months.

** Recent economic data has shown subdued demand and weaker investor sentiment, raising expectations that authorities will ease monetary policy to sustain growth.

** "The rate cut will help ease economic pressure, and aid demand recovery, but it's not enough," said Rocky Fan, economist at Guolian Securities. He said China still needs more fiscal stimulus, and may loosen property curbs.

** "A sharp acceleration in credit growth is still unlikely and that the recovery will continue to mostly depend on the service sector," said Julian Evans-Pritchard, head of China economics at Capital Economics.

** Offsetting some of the optimism, the U.S. imposed sanctions on Tuesday on more than a dozen people and entities in China, Hong Kong and Iran, including Iran's defense attache in Beijing, over accusations they helped procure parts and technology for key actors in Iran's ballistic missile development.

** Shares in artificial intelligence companies jumped nearly 3%, while information technology and media firms climbed more than 2% each.

** Energy stocks dropped 1.5%.

** In Hong Kong, tech giants advanced roughly 2%, with Alibaba and Tencent up 3% and 1.8%, respectively.

(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)