SHANGHAI: China stocks fell on Monday and Hong Kong shares saw their biggest intraday decline since May 6, as COVID-19 uncertainty sparked worries of lockdowns, while US inflation raised concerns the Federal Reserve will continue to tighten policy.

The blue-chip CSI300 index fell 1.2% to 4,189.35, while the Shanghai Composite Index lost 0.9% to 3,255.55 points.

The Hang Seng index fell 3.4% to 21,067.58, while the China Enterprises Index lost 3.5% to 7,340.52 points.

Authorities in Beijing on Monday raced to contain a COVID outbreak traced to a 24-hour bar, with millions facing mandatory testing and thousands under targeted lockdowns, while Shanghai completed mass testing for most of its 25 million residents at the weekend.

Global equity markets slumped as the US consumer price index posted an 8.6% rise last month, the largest year-on-year increase since December 1981.

CICC analysts said A-shares might continue to rebound in bumpy trade in the short term, but performance for the second half of this year will depend on the economy’s fundamentals due to both domestic and overseas uncertainties.

New bank lending in China jumped far more than expected in May and broader credit growth also quickened as Beijing steps up policy support.

However, 38% of the new monthly loans were in the form of short-term bill financing, suggesting real credit demand remains weak.

Real estate developers tumbled more than 3%, while shares in tourism, banks and infrastructure lost more than 2% each.

Automobiles and non-ferrous metal rose more than 2% each.