SHANGHAI: China stocks closed down on Monday, after rising for nine consecutive sessions, as investors questioned whether the recent rally could be sustained.

China’s blue-chip CSI300 Index ended 1% lower, while the Shanghai Composite Index lost 0.9%. The Hong Kong benchmark Hang Seng Index fell 0.5%.

The CSI300 Index rebounded roughly 12% from its five-year low hit earlier this month but investors are wondering whether the trend could last.

The recent rebound is more because of the market being oversold and short covering, said Raymond Chan, chief investment officer for equity in Asia Pacific at Allianz Global Investors.

“As long as the deflation cycle is still there, it’s going to be a concern for the Chinese equity market,” Chan said.

The rebound has come about from a combination of state-led intervention and regulatory restrictions, said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

“So, there is certainly a question mark about how sustainable is the rebound,” Tan said.

China’s President Xi Jinping held a meeting of a key economic policy body on Friday, the Central Financial and Economic Affairs Commission, to discuss providing support to manufacturers and lowering logistics costs, state media reported.

Consumer discretionary and auto shares rose 1.1% and 1.9%, respectively, bucking the trend.

Meanwhile, Chinese investors continued pouring money into Japan- and US- focused stock funds as the Nikkei and Nasdaq kept rallying, triggering warnings from fund managers about market risks.

ICBC Credit Suisse Asset Management flagged risks to investors on Monday for its exchange-traded fund (ETF) tracking the Nikkei 225 as the trading price far exceeded the net asset value of the fund.

In Hong Kong, Country Garden Services Holdings jumped 5.3%.

Shares of sports brands Anta and Lining dropped roughly 2% and 3.8%, respectively.