China, HK stocks fall as markets await more stimulus measures

SHANGHAI: China stocks dropped on Friday, weighed down by liquor and auto manufacturers, as analysts await more stimulus measures to help revive the uneven economy and lift risk appetite. Hong Kong stocks tracked their U.S. peers lower.

China's blue-chip CSI300 Index closed 0.7% lower, while the Shanghai Composite Index lost 0.5%. Hong Kong's benchmark Hang Seng Index dropped 1.8%, down 2.6% for the week. Auto shares led the declines, down 3%, with Chongqing Changan Auto Co losing 5.2%.

Liquor shares extended their decline to drop 1.3%.

Despite an uptick in sentiment on higher turnover, mixed October macro data reaffirmed that macro pressure persists, said analysts at Morgan Stanley.

For more sustainable recovery of market sentiment and fund flows, further reflationary measures and debt restructuring efforts would be key, analysts added.

Northbound trading has seen a net capital outflow of 4.7 billion yuan ($644.54 million) by midday, after the week of Nov. 2-8 recorded first net inflows since early August. Meanwhile, investors are watching closely any signs that could affect the relationship between Beijing and Washington.

U.S. Treasury Secretary Janet Yellen began two days of meetings with Chinese Vice Premier He Lifeng on Thursday, ahead of Asia-Pacific Economic Cooperation (APEC) summit next week.

Hong Kong stocks tracked their counterparts in New York lower after hawkish comments from Federal Reserve Chair Jerome Powell weighed on the market.

Shares of electric vehicle (EV) companies such as Li Auto and Xpeng were down more than 5% each.Tech stocks lost nearly 3%.