* Chinese blue-chip fall 2.3%, Shanghai shares down 1.9%
* Both benchmarks suffer worst drop since March
* China abandons annual GDP growth target amid headwinds
* Beijing pushes HK security law; Trump vows response
HONG KONG, May 22 (Reuters) - 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%.
** 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 U.S.-China tensions,” said Kenny Ng, a strategist at brokerage Everbright Sun Hung Kai. ** The already-tense U.S.-China relations were set to worsen as the U.S. State Dept warned Beijing over the new law on Thursday and as Republican and Democratic senators threatened sanctions on Chinese officials. ** Hong Kong stocks were headed for their worst day since 2015 and with the property sub-index plunging over 8%. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 2.8%, while Japan’s Nikkei index closed down 0.8%. ** 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.
Reporting by Noah Sin, Editing by Sherry Jacob-Phillips