China’s blue-chip CSI300 Index lost 0.6% by the end of the morning session, while the Shanghai Composite Index edged up 0.2%.

Hong Kong’s benchmark Hang Seng Index was down 0.3%, and the China Enterprises Index fell 0.6%.

Official data on Saturday showed that profit at China’s industrial firms fell 20.6% in January-April, from a year earlier, as companies continued to struggle with margin pressures and soft demand amid a faltering economic recovery.

Chinese companies are struggling with both weak demand at home and softening demand in the country’s major export markets.

Apart from a faltering economy, market participants are also worried about an escalating Sino-US dispute over technology.

Underscoring foreign investor concerns, foreign money managers sold a net 17.9 billion yuan (US$2.59 billion) of China stocks via the Stock Connect Scheme last week, marking the biggest weekly foreign outflow since late October 2022.

New energy firms slumped 2.6%, machinery companies dropped 2.1% and consumer discretionary shares fell 1.4% to lead the declines.

Meanwhile, media and communications equipment stocks rose 3% and 2.1%, respectively.

Tech giants listed in Hong Kong slipped 0.4%.

Food delivery giant Meituan slumped 6.4% even after it returned to a net profit in the first quarter on forecast-beating revenue as it fended off competition from rivals.