The Hang Seng Index retreated 1.6 per cent to 16,1989.97 at 11.16am local time, heading for the lowest close since November last year. The Tech Index dropped 1.8 per cent and the Shanghai Composite Index declined 0.4 per cent.

China’s top lender ICBC weakened 0.6 per cent to HK$3.62 while Construction Bank lost 0.7 per cent to HK$4.41 and Bank of China fell 0.7 per cent to HK$2.80. Moody’s lowered their rating outlook to negative from stable to reflect the risk of China’s economic growth. China Merchants Bank tumbled 3.4 per cent to HK$25.65.

Elsewhere, WuXi Biologics failed to sustain a rebound, losing 4.9 per cent to HK$29.20. Alibaba Group slid 1.5 per cent to HK$69.10 and Tencent lost 2.2 per cent to HK$304.60.

Moody’s cut in the rating outlook also affected Agricultural Bank of China, Postal Savings Bank of China, Agricultural Development Bank of China, China Development Bank and the Export-Import Bank of China, as well as Hong Kong’s outlook. Moody’s downgraded China’s A1 rating outlook to negative a day earlier.

In Hong Kong, four firms get US$2.6 billion support to stem stocks rout

“China’s economy is still enduring a correction and it seems growth is unlikely to reaccelerate any time soon,” said Wu Kan, an analyst at Soochow Securities in Shanghai. “Sentiment is weak” going into the year end, he added.

The Hang Seng Index has dropped 18 per cent this year, making it the worst performer among the world’s key benchmarks this year, erasing about US$630 billion of market value through this week. The sell-offs have led to a slew of stock buy-back plans from Meituan, Wuxi Biologics and Swire Pacific to help stem the rout.

Other major Asian markets all fell. Japan’s Nikkei 225 slipped 1.6 per cent, while South Korea’s Kospi retreated 0.2 per cent and Australia’s S&P/ASX 200 lost 0.4 per cent.