Financial Sector Troubles Lead to China and Hong Kong Stock Dip

China and Hong Kong stocks fell on Thursday, influenced by weak lender earnings and corrections in major state bank stock prices. Xiamen Bank reported a 15% decline in half-year net profit causing a significant dip. UBS revised its economic growth forecast for China, citing weaker property activity as a concern.

China and Hong Kong stocks dropped on Thursday, extended by the financial sector following poor earnings reports from some lenders and corrections in stock prices of major state banks. China's CSI Financials index lost 1.4% with Xiamen Bank plummeting 7.5% after reporting a 15% decline in half-year net profit.

In Hong Kong, Citic Bank and Bank of Communications saw their shares decrease by 5.5% and 6.2%, respectively. UBS on Wednesday slashed its 2024 economic growth forecast for China to 4.6% from 4.9%, anticipating a larger-than-expected drag from weakened property activity on the overall economy.

Shares of electric vehicle maker Li Auto fell 10.2% following disappointing second-quarter earnings. The Shanghai Composite index fell 0.45% by midday, while China's blue-chip CSI 300 index slipped 0.07%. Chinese H-shares listed in Hong Kong were down 0.93%, and the Hang Seng Index dropped 0.65%, showing a broader regional market decline.

(With inputs from agencies.)