HONG KONG (Reuters) - Stocks in China and Hong Kong fell on Wednesday as the Chinese yuan hit a fresh 5-1/2 year low against the dollar while worries about global growth and the long-run implications of Brexit hammered risky assets of all stripes.
China's yuan hit a fresh low against the dollar in early trade on Wednesday, after the central bank set its official midpoint at its lowest level since November 2010.
While the focus was on sterling, which reached a fresh 31-year trough early on Wednesday on Brexit anxiety, Beijing allowed the yuan to fall to the lowest since late 2010, which traders fear could signal an even steeper decline.
"Worries over Brexit have heightened and the sterling fell sharply," said Ben Kwong, chief operating officer of KGI Asia. "The weakening sterling is adding to depreciation pressure of the yuan, which has dragged Chinese shares both in Shanghai and Hong Kong."
- PHOTOS: New art and old relics at Mickey Mouse's NYC gallery 25 Pictures
- PHOTOS: See Yes on 3 supporters react to historic transgender rights Question 3 win 11 Pictures
- PHOTOS: A look back at Queen performing in the 1970s and 1980s 22 Pictures
- All of these celebrities have had their nudes leaked 35 Pictures
- PHOTOS: A look at Idris Elba's style through the years 20 Pictures
- PHOTOS: Heidi Klum's annual Halloween party and other amazing celebrity costumes 17 Pictures
- These are the spookiest cities per capita in the U.S. 5 Pictures
- Food Network star talks pumpkin carving 1 Pictures
- Who is Alexander Edwards, Amber Rose's new boyfriend? 9 Pictures
- Is Cardi B pregnant again? This tweet has people guessing 6 Pictures
- Natural Museum's best wildlife photos of the year 5 Pictures
The mainland's blue-chip CSI300 index <.CSI300> fell 0.3 percent to 3,199.16 points by the lunch break, and the Shanghai Composite Index <.SSEC> slid 0.2 percent to 3,001.07.
"Risk-averse appetite is dominating global markets today, including Hong Kong shares," Kwong added.
Hong Kong's blue chip Hang Seng Index <.HSI> fell 1.9 percent to 20,359.35, and the China enterprises index <.HSCE> slid 2.1 percent. Both indices appeared on track for their biggest one-day percentage decline since June 24.
In China, sector performance was mixed with consumer stocks <.CSI300CS> gaining 2.1 percent, while resources <.CSI300MT> and healthcare <.CSI300HC> were up more than 1 percent. Banks <.CSI300BI> slid.
(Reporting by Michelle Chen and Donny Kwok; Editing by Richard Borsuk)