SHANGHAI, Dec 29 (Reuters) - Chinese and Hong Kong stocks ended 2023 as the world's worst-performing equity markets, with losses exceeding 10%, although they recorded their best week in five months.

** China's blue chip CSI 300 Index registered an unprecedented third straight year of declines amid the country's faltering post-pandemic recovery and geopolitical tensions, but some see opportunities in the battered shares.

** "We have turned tactically positive on China," Jefferies said in its 2024 outlook, citing Beijing's economic stimulus, the rebounding yuan currency, and "trough valuation".

** On Friday, the index rose 0.5%, and was up 2.8% for the week. Hong Kong's Hang Seng Index ended the session flat, but registered a 4.3% weekly gain.

** However, the indexes sit at the bottom of the 2023 global performance rankings, with Hang Seng slumping 14% for the year in a fourth year of declines, and CSI 300 falling 11%.

** In contrast, the MSCI world equity index is set to end 2023 up around 20%, with stellar gains recorded in markets including the United States, Japan, India and Mexico.

** China "disappointed investors who expected a strong recovery" after COVID-19, William Witherell, chief global economist at Cumberland Advisors said in a note.

** "The economy was hit with widespread and persistent housing and local government debt problems, the clean-up of which continues."

** Property shares led the declines in 2023, with Chinese developers slumping 39%. Retailing, new energy and tourism were also among the biggest losers.

** Underscoring shrivelling confidence, net foreign buying via Stock Connect this year totalled roughly 44 billion yuan ($6.20 billion) - the smallest since 2015 - as overseas investors retreated in droves since August.

** But some see deep value in the battered stocks. Shanghai hedge fund manager Li Bei said in a post on Friday that investors that are underweight on China may be forced to add positions in 2024 as the market has likely bottomed.

** AllianceBernstein admitted China stock valuation is low, and expects the country's corporate earnings growth to outpace that of developed markets in 2024.

** However, "while that combination is tempting, we still lack enough conviction to overweight amid the geopolitical risks and secular challenges," its strategy team, led by chief investment officer Alexander Chaloff, wrote.

($1 = 7.0977 Chinese yuan renminbi) (Reporting by Shanghai Newsroom; Editing by Sonia Cheema and Varun H K)