Chinese Stocks Face Major Setback Amid Economic Uncertainty

Chinese and Hong Kong stocks experienced significant declines, marking the largest weekly loss since July. Investors remain skeptical about China's economic recovery, further impacted by disappointing output growth and ongoing geopolitical tensions. The real estate sector was particularly affected while retail sales showed an upswing.

Chinese stocks endured their steepest weekly decline since July, with Hong Kong shares wiping away initial gains and ending slightly lower on Friday. Apprehensions about China's ability to sustain economic recovery continue to cloud the market.

The skepticism was reinforced when industrial output grew by 5.3% year-on-year in October, a slowdown from the prior month that also fell short of expectations. Disappointing stimulus measures from Beijing and fears of deteriorating Sino-U.S. relations following Donald Trump's election victory are adding to market concerns.

China's blue-chip CSI 300 Index dropped 1.8%, bringing the week's losses to 3.3%, while the Shanghai Composite Index fell 1.5%. Meanwhile, Hong Kong's Hang Seng Index lost earlier gains, marking its sixth consecutive day of losses and its longest losing streak since January. The real estate sector led the downturn, with new home prices in China experiencing the steepest year-on-year decline since 2015. However, retail sales provided a glimmer of hope with a 4.8% increase, the strongest since February.

(With inputs from agencies.)