China stocks drop most in 9 weeks

Chinese stocks dropped on Friday, wrapping up their worst week since March, as concerns over economic growth and renewed tensions with the United States following a new national security law in Hong Kong dented investor sentiment.

At the close, the Shanghai Composite index was down 1.9% at 2,813.77. It fell by the same margin on a weekly basis. The blue-chip CSI300 index fell 2.3% on Friday and was also down by the same for the week. Both benchmarks marked their worst week since March.

The financial sector sub-index dropped 2.3%, the consumer staples sector was down 2.8%, the real estate index lost almost 2% and the healthcare sub-index was down 2.9%.

The smaller Shenzhen index ended 2% lower and the start-up board ChiNext Composite index fell 2.5%. The Chinese yuan fell against the dollar to its weakest levels in more than seven months.

About 20.91 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 20.35 billion.

China refrained from setting a 2020 GDP growth target and pledged to step up spending and financing to support its economy, the first time that the Asian country did not set a gross domestic product (GDP) goal since 1990 when the government started to publish such targets.

Khiem Do, head of Greater China Investments at Barings, said short-term traders were mostly concerned with the absence of a growth on Friday. "The market was hoping they would give some kind of number, 2% or 3%, but that wasn't available."

Beijing plans to impose a national security legislation to tackle secession, subversion and terrorism activities, as well as foreign interference, according to a draft of the legislation seen by Reuters.

"The security law could re-focus the HK market's attention on the social incidents and US-China tensions," said Kenny Ng, a strategist at brokerage Everbright Sun Hung Kai.

The already-tense US-China relations were set to worsen as the US State Dept warned Beijing over the new law on Thursday and as Republican and Democratic senators threatened sanctions on Chinese officials.