SHANGHAI: Chinese blue-chip stocks fell on Monday amid concerns that the Middle East conflict could widen, despite some stabilising signs in economic recovery and the authorities’ latest measures to shore up investor confidence.

The blue-chip CSI 300 Index lost 1% by the close, and was near levels seen nearly a year ago, while the Shanghai Composite Index closed 0.5% lower.

Hong Kong’s Hang Seng Index dropped 1% and the Hang Seng China Enterprises Index declined 1.1%.

Crude oil hovered above $90 a barrel, while equities were weak and the safe-haven dollar was firm, as investors nervously watched whether the escalating violence in Gaza would cause the conflict to spread beyond Israel and Hamas.

China released a mixed batch of data on Friday which showed a slump in exports and imports was gradually easing, but lingering deflationary pressures underlined the challenges policymakers face in trying to engineer a stronger recovery.

To boost sentiment, China’s securities regulator on Saturday said it would restrict securities lending businesses and tighten scrutiny on improper regulatory arbitrage.

“The effect of the policy is limited as investors are more eager to see fundamental improvement signs,” said Yuan Yuwei, fund manager at Water Wisdom Asset Management.

Separately, China’s central bank ramped up liquidity support to the banking system as it rolled over medium-term policy loans on Monday but kept the interest rate unchanged as expected.

Investors are awaiting China’s growth data for the third quarter due this Wednesday to measure the recovery momentum.

The US will take steps to prevent American chipmakers from selling semiconductors to China that circumvent government restrictions, a US official said.

The news sent the semiconductor index tumbling 3%, while new energy dropped 2.3% and property developers fell 2.6%.

Foreign investors sold a net 6.5 billion yuan ($889 million) of Chinese shares via the Stock Connect on Monday. Tech giants listed in Hong Kong lost 1.8%.