Stock markets in China and Hong Kong declined Thursday as weaker-than-expected data on monthly U.S. retail sales and renewed concerns about the debt-laden euro zone weighed on the sentiment.

Hong Kong's Hang Seng fell 0.91 percent or 172.67 points to 18,853.85 and Chinese Shanghai Composite declined 0.80 percent or 18.59 points to 2,300.33.

The Commerce Department announced Wednesday that retail sales fell 0.2 percent in May and April, hurt by a sharp decline in gas prices. Excluding volatile gas station sales, sales rose just 0.1 percent in May and declined 0.1 percent in April. It was the first back-to-back decline in nearly two years and fueled concern that the recovery in the world's largest economy is slackening.

Meanwhile, concerns over the European debt crisis revived Wednesday after Moody's downgraded Spain's rating by three notches to Baa3 from A3, citing the nation's increased debt burden due to the recently approved EU aid for Spanish banks.

Moody's has said that Spain has very limited access to the international debt market and its economy is showing continued weakness and is vulnerable to sudden halt in funding.

Worries about Italy's rising bond yields also weighed on the sentiment. On Wednesday, Italy paid an interest rate of 3.972 percent for one-year treasuries, nearly double the rate of 2.34 percent paid in the similar auction a month before. Investors are likely to focus on Italy's long-term bond auction later Thursday, where it will sell long-term debt of up to 4.5 billion euros.

Retail sector shares led the decline in Hong Kong after weak U.S. economic data. Esprit Holdings Ltd plunged 12.52 percent Thursday after slumping more than 21 percent in the previous session following the sudden resignation of its chief executive Ronald van der Vis.

Among other stocks, China Unicom Hong Kong Ltd fell 1.63 percent and Li & Fung declined 2.89 percent while Hutchison Whampoa Ltd slipped 1.40 percent.