China, HK shares fall as Wall Street sell-off hits sentiment in Asia

China stocks sank to seven-month lows on Wednesday, while Hong Kong shares dropped more than 1%, tracking declines in Asian markets as a sharp tech sell-off on Wall Street and a slump in oil prices hit sentiment. Risk appetite was also curbed by China's slowdown in services sector activities and elevated trade frictions between China and Canada.

China stocks sank to seven-month lows on Wednesday, while Hong Kong shares dropped more than 1%, tracking declines in Asian markets as a sharp tech sell-off on Wall Street and a slump in oil prices hit sentiment.

Risk appetite was also curbed by China's slowdown in services sector activities and elevated trade frictions between China and Canada. By the midday break, China's blue-chip CSI 300 lost 0.4%, touching the lowest level since early February. The Shanghai Composite Index dipped 0.5%. Hong Kong's benchmark Hang Seng Index lost 1.1%.

Tech shares fell in both markets, after shares of artificial intelligence heavyweight Nvidia tumbled 9.5% on Tuesday in the U.S., hitting sentiment in the sector globally. U.S. stock benchmarks registered their biggest daily drop since early August. "Hong Kong is pretty weak so whenever we see a negative signal like that from the U.S., Hong Kong will be performing even worse," said Steven Leung, executive director of institutional sales at UOB Kay Hian.

Leung said unlike the correction in August, which was affected by the unwinding of the yen carry trade, the main driver of the market weakness this time was concerns over the strength of the U.S. economy. "It's more scary, because it's not a technical reason, it's a more fundamental issue," he said.

Investors are also fretting over the health of China's economy, after a private survey released on Wednesday showed growth in China's services sector activity slowed in August despite the summer travel peak. Energy shares in both Shanghai and Hong Kong led the declines, as oil prices extended Tuesday's slump on global growth fears and expectations the political dispute that has halted Libyan exports may be resolved.

An index tracking Hong Kong-listed energy shares slumped 4.4%, while China's CSI energy index dropped 1.9%. Shares of oil giants CNOOC and PetroChina slumped more than 5% in both markets.

China's CSI 5G Communication Index was down 1.5%, while Hong Kong's tech index slipped 0.4%. Bucking the trend, China's start-up board ChiNext Composite index was up 0.35%.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)