China, HK stocks fall on persisting worries of policy tightening

Leading the declines, the CSI300 materials index and the CSI300 transport index slumped 3.4% and 3.9%, respectively. China's Q1 economic growth data probably would beat market expectations, which could raise worries over a quick tightening of monetary policy, Huaan Securities noted in a report.

China and Hong Kong stocks started the week on a downbeat note on Monday, as worries over policy tightening persisted on expectations of upbeat economic data due later this month.

The CSI300 index fell 1.4% to 4,964.39 at the end of the morning session, while the Shanghai Composite Index lost 0.8% to 3,422.70. Leading the declines, the CSI300 materials index and the CSI300 transport index slumped 3.4% and 3.9%, respectively.

China's Q1 economic growth data probably would beat market expectations, which could raise worries over a quick tightening of monetary policy, Huaan Securities noted in a report. The market could also encounter challenges as much stronger than expected PPI could lead to marginal changes in monetary policy, the brokerage added.

The denting sentiment was ongoing Sino-U.S. tensions. U.S. Secretary of State Antony Blinken said on Sunday the United States is concerned about China's aggressive actions against Taiwan and warned it would be a "serious mistake" for anyone to try to change the status quo in the Western Pacific by force.

In Hong Kong, the Hang Seng index dropped 1.0% to 28,417.24, while the Hong Kong China Enterprises Index lost 1.0% to 10,865.51. China's Alibaba does not expect any material impact from changes to its exclusivity arrangements with merchants, CEO Daniel Zhang said on Monday after regulators fined the e-commerce giant a record $2.75 billion for abusing its market dominance.

Shares in Alibaba Group Holdings Ltd rose as much as 9% in Hong Kong trade. "In the short term, Ali will have a rebound because (the fine) cleared the air," said Louis Tse, managing director of Wealthy Securities in Hong Kong.

"Of course they don't want to kill the goose that can lay the golden eggs," he added. However, the Hang Seng tech index slid 1.6%, on worries that other platform companies could face antitrust fines.