SHANGHAI: Chinese and Hong Kong stocks fell on Wednesday as investors booked profits after a recent policy support-led rally, while the property sector’s woes were seen persisting after a liquidation petition was filed against Country Garden.

China’s blue-chip CSI 300 Index closed down 1.3%, the biggest daily decline this month, while the Shanghai Composite Index slumped 1.9%.

Hong Kong benchmark Hang Seng Index fell 1.5%, and the Hang Seng China Enterprises Index lost 2%.

Broader Asian stocks also eased in cautious trading ahead of a US inflation reading this week that could influence the timing of the Federal Reserve’s easing cycle.

Country Garden said a liquidation petition has been filed against it for non-payment of a $205 million loan, clouding its debt revamp prospects and undermining Beijing’s effort to restore confidence in the property sector.

Shares of the developer slumped 12.5%, dragging the mainland property sector listed in Hong Kong down 3.7%.

The Hang Seng Property Index also slipped 0.6%, even after Hong Kong Financial Secretary Paul Chan said the city will cancel all buy-side property tightening measures for residential properties and waive stamp duties payable on transfer of REIT units.

In mainland markets, shares in semiconductors and automobiles declined more than 4% each after jumping in the previous session.

Small-cap index CSI 2000 plunged 6.8%, underperforming large and medium-cap companies.

The market might remain rangebound in the short term after a recent rally on supportive measures, Furong Asset said in a note.

Despite Wednesday’s decline, however, the CSI 300 is up 7.3% so far this month and is set for its best month in one year, helped by authorities’ measures to spur economic growth and boost market confidence.

Market participants are awaiting authorities’ next policy move as China’s rubber stamp parliament - the National People’s Congress - begins its annual meeting on March 5.