SHANGHAI: China stocks fell on Monday, as Beijing’s supportive gestures failed to steady a sliding market, with investors unsettled by higher global interest rates and rising geopolitical tensions.
The US launching probes into technology firms including Luxshare Precision Industry and Foxconn Industrial Internet further dented risk appetite.
"The main anxiety comes from rising global yields," Caitong Securities said in its market outlook.
"There's also the tail risk of a potential debt crisis" stemming from the weakest governments in the euro zone, Caitong Securities said.
China's large-cap CSI300 Index lost 0.2% in the morning session, struggling near a one-year low. The Shanghai Composite Index slipped 0.1%.
In Hong Kong, the Hang Seng Index edged up 0.2%.
Market reaction was muted after China’s top securities regulator Wu Qing held a seminar with market participants on Saturday to hear their suggestions on improving the capital market.
In another sign of government support, regulators on Friday published draft rules that would lower the threshold for setting up equity mutual funds.
The market has been dogged by the threat of rising bond yields as the widening war in the Middle East pushed oil prices higher, fuelling inflation concerns.
Investors also worry that rising tensions with trading partners would hurt Chinese exports - one of the rare bright spots in China’s unbalanced economy.
On Friday, European trade commissioner Maros Sefcovic said China and the European Union had reached a deal that could cut Chinese exports of hybrid cars to the bloc by more than half.
China's tech stocks declined on Monday, with Luxshare and Foxconn down after the US launched patent infringement investigations against the two companies.
Foxconn slumped as much as 7% to a six-month low, while Luxshare was down 2%, almost touching the lowest since March.
Consumer electronics, telecommunication and real estate were among the biggest losers in China, while banks and consumer stocks gained.
In Hong Kong, banks and biotech stocks rose, while chipmakers and AI stocks fell.