HONG KONG, March 12 Reuters China stock investors, already disillusioned by Beijing39;s lowerthanexpected economic growth target for the year, will be further disheartened by the shock collapse of U.S. lender SVB Financial Group, market participants said.

China39;s CSI300 Index dropped 4 last week, while Hong Kong39;s Hang Seng tumbled 6, as China39;s moderate GDP growth target of around 5 for 2023 set during the annual session of the rubberstamp parliament dashed hopes for a big stimulus.

The market mood could be damped further following Friday39;s sudden collapse of startup focused lender SVB, which stirred heated discussion over the weekend in China about its fallout.

The SVB failure is a barometer of macro risks … reflecting how asset prices are being impacted by central bank rate hikes, said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management, predicting tougher times for highlyleveraged firms with illiquid assets.

Although the event will unlikely trigger another financial crisis, it could have a negative psychological impact on China markets, he said.

SVB39;s Chinese joint venture with Shanghai Pudong Development Bank said on Saturday that it has a sound corporate structure and an independently operated balance sheet, in an apparent effort to pacify local clients.

But many Chinese tech startups, especially those with dollar funding, have opened U.S. accounts at SVB. At least one WeChat group with several hundred members has been formed by…