SHANGHAI, Dec 6 Reuters China39;s bluechip stocks slumped to an almost fiveyear trough on Wednesday while the yuan currency extended losses, as markets grappled with Moody39;s cut to China39;s credit outlook at a time of growing worries about the economy39;s stuttering recovery.

The ratings agency issued a downgrade warning on China39;s sovereign credit rating on Tuesday, saying costs to bail out local governments and state firms and control its property crisis would weigh on the world39;s secondlargest economy.

China stocks opened down with the CSI300 Index touching its lowest level since Feb. 2019, before recouping earlier losses. It was 0.4 higher as of 0612 GMT, with the Shanghai Composite Index up by 0.1.

Chinese markets have had a torrid time this year as a shaky economic recovery and a deepening property crisis have added to geopolitical challenges, including protracted SinoU.S. tensions over tech and trade.

The CSI300 Index has tumbled about 12 so far this year and is set to record one of the worst performer in the region.

The Hang Seng Index, meanwhile, rebounded roughly 1.13 as of 0612 GMT, with tech shares leading gains.

The CSI300 index was hit the hardest in terms of valuation, as the index gets more allocations from foreign investors. Adding the impact of Moody39;s cut, the index may find a bottom and rebound soon, said Pang Xichun, research director at Nanjing RiskHunt Investment Management Co.

Foreign capital recorded a net inflow via the…