Market Skid: China's Economic Woes Deepen with Stock Plunge

China and Hong Kong stocks witnessed significant declines, affected by poor economic data and Wall Street's tech-driven sell-off. The sentiment darkened with a possible leadership change at the China Securities Regulatory Commission. Despite economic weakening, major policy shifts are not expected before year-end.

China and Hong Kong stocks faced their steepest drop in nearly a month on Friday, dragged down by negative sentiment from Wall Street and disappointing economic data from China.

Uncertainty loomed as headlines emerged regarding Wu Qing's potential exit from the top position at the China Securities Regulatory Commission. On the market front, China's blue-chip CSI300 Index fell by 1.6%, while the Shanghai Composite Index lost 1%, reaching a decade-high decline. Hong Kong's Hang Seng fell 1.9%, marking its weakest performance since October 17.

Technology shares were at the forefront of this decline, primarily influenced by significant sell-offs in Nvidia and major AI stocks across Wall Street. This was compounded by China's lackluster economic recovery data, highlighting underwhelming factory output, retail sales, and falling home prices. Despite these setbacks, analysts suggest that China's overall growth target remains intact, although caution in policy adjustments is likely for the remainder of the year.

(With inputs from agencies.)