Hong Kong stocks fell to a one-month low on heightened concerns about widening debt defaults among Chinese developers. A resurgence of the Delta variant in China has led to stricter lockdowns, clouding economic outlook. The Hang Seng Index tumbled 1.4 per cent to 24,870.51 at the end of Friday trading, the lowest level since October 8. The index lost 2 per cent this week, following a 2.9 per cent plunge in the preceding week. China‘s Shanghai Composite Index declined 1 per cent. Property developers Country Garden fell 2.7 per cent while Longfor Group and China Overseas Land declined at least 1 per cent. Evergrande slid 2.5 per cent to HK$2.30, while shares of Kaisa Group were halted from trading after the Shenzhen-based developer missed a payment on some of the 12.7 billion yuan (US$2 billion) of so-called wealth management products. Debt concerns revived after Kaisa sought more time to come up with a solution and authorities are said to have summoned the firm for a lecture. The latest episode ended six years of relative calm since the firm became the first Chinese developer to default on a dollar-denominated bond in 2015. This added to a string of defaulters after China’s “three red lines” deleveraging campaign shut many out of the loan market. While China Evergrande has struggled to restructure its US$305 billion liabilities, others including Fantasia Holdings and Modern Land have reneged on their offshore borrowings. Banking stocks also slipped on worries about their exposure to Chinese developers. ICBC and Construction Bank both retreated at least 1.3 per cent. Elsewhere, HSBC and Standard Chartered lost 3.6 per cent each, following steep declines in banking stocks in London after the Bank of England failed to make a widely anticipated interest-rate hike, raising questions about its communications to the financial markets. China is also confronting its broadest outbreak since 2019 as the Delta variant spread to 20 of 31 mainland provinces. Lockdowns and other strict controls to curb the flare-ups is weighing on the economy that has lost momentum over the past two quarters. Chinese technology stocks also dragged the market lower as the industry benchmark slid 1.6 per cent. Alibaba Group Holding sank 3.4 per cent, while Meituan and Tencent Holdings retreated by at least 2.8 per cent. Two companies began trading for the first time in Hong Kong. Beijing Airdoc Technology retreated 9.3 per cent to HK$68, while Clover Biopharmaceuticals declined 3 per cent to HK$12.98. Stocks in Asia-Pacific markets were mixed, with benchmarks in Japan and South Korea losing about 0.5 per cent while equities in Australia gained 0.4 per cent.