SHANGHAI: China and Hong Kong stocks fell on Thursday, tracking subdued Asian peers, as China’s rising COVID-19 cases, disappointing economic data and the US Federal Reserve projecting higher interest rates for a longer period weighed on sentiment.

China reported worse-than-expected factory output and retail sales data for November, amid widespread COVID curbs.

China’s blue-chip CSI300 Index dipped 0.1% at close, while the Shanghai Composite Index fell 0.3%. Hong Kong’s Hang Seng Index dropped 1.6%.

Major Chinese cities, including the capital Beijing, continue to grapple with a surge in infections, after the country dropped strict zero-COVID restrictions last week.

“As China reopens its economy, the economic activities inevitably slow, but experience from other countries show this slowdown is temporary,” wrote Zhiwei Zhang, chief economist at Pinpoint Asset Management.

Investors largely ignored government’s newly-published plans to expand domestic consumption and investment.

Risk appetite was also curbed by another rate hike by the Fed, which vows to deliver more hikes next year even as the US economy slips towards a possible recession.

Chinese property shares fell in both Hong Kong and the mainland, after Beijing’s new growth plan reiterated that “housing is for living, not for speculating”, dashing hopes of a policy reversal.

“We see a lot of selling interests on our side to sell Chinese property names,” said Tareck Horchani, head of dealing, Prime Brokerage, Maybank Securities, Singapore.

But Chinese vaccine stocks jumped, as the government works to boost vaccination, especially among the elderly.