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HK stocks fall on China growth, policy tightening worries

July 2 (Reuters) - Hong Kong stocks fell the most in seven weeks on Friday as sentiment was weighed down by fears of policy tightening by Beijing and slower economic growth in the mainland.

** The Hang Seng index fell 1.8% to 28,310.42, while the China Enterprises Index lost 2.3% to 10,415.58 points, amid broader weakness in Asia.

** “Increased tightening fears out of China combined with greater uncertainly around the impact of the Delta variant may have steered confidence sharply lower amongst Asia investors,” State Street Global Markets wrote.

** Investors are also worried about slower growth in China. Morgan Stanley lowered its forecast for China’s second-quarter economic growth due to broad-based macro weakness seen in April-June.

** Data released on Wednesday showed growth in China’s June factory activity dipped to a four-month low, while China’s non-manufacturing Purchasing Managers’ Index (PMI) also fell during the month.

** The Hang Seng Tech Index, which tracks some of China’s biggest technology firms such as Tencent Holdings and JD.com, slumped 3.2%.

** China Evergrande Group remained weak, after the country’s most indebted property developer said contracted property sales in June fell 5.8% from a year earlier.

** “Onshore and offshore capital markets will remain volatile amid tight credit conditions for developers and weak investor sentiment,” Celine Yang, a Moody’s Vice President and Senior Analyst, said in a statement on Friday. (Reporting by the Shanghai Newsroom)

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