Moody's downgrades eight Chinese banks, Hong Kong

Moody's Investors Service cut its outlook for eight Chinese banks to negative from stable, a day after its bearish stance on the nation's sovereign bonds due to concern over the level of debt.

The rating action for financial institutions including Industrial and Commercial Bank of China and the China Development Bank was primarily driven by the change in outlook to negative from stable on the government's credit ratings, according to a statement from Moody's on Wednesday.

Moody's also cut its outlook on Hong Kong and Macau and placed 26 Chinese local government financing vehicles on review for downgrade. The agency said there were signs of reduced autonomy of Hong Kong's political and judiciary institutions after the implementation of a National Security Law. The Hong Kong government said Moody's made "unfounded comments" on the city's autonomy and disagreed with the change to outlook.