SHANGHAI: Mainland China and Hong Kong stocks fell on Monday, as investors cautiously awaited key economic data at home and other US indicators that will help shape Federal Reserve policy expectations.

China stocks fall as strong trade numbers soften stimulus expectations

• Trade frictions remain another key focus of the markets. China and the European Union have agreed to start talks on the planned imposition of tariffs on Chinese-made electric vehicles (EVs) being imported into the European market, senior officials of both sides said on Saturday.

• “Stock market valuation has reflected the weak fundamentals of the economy, stocks and the yuan are likely to consolidate at current levels waiting for more data and policy measures,” said Nie Wen, economist at Hwabao Trust.

• China is due to release May industrial profits on Friday and June manufacturing survey on Sunday, while traders will also focus on the US personal consumption expenditures (PCE) price index, which serves as the Federal Reserve’s favoured gauge of inflation - due on Friday.

• At the midday break, the Shanghai Composite index was down 0.7% at 2,977.24 points.

• China’s blue-chip CSI300 index was down 0.16%, with the real estate index down 1.73% and the healthcare sub-index down 0.24%.

• Chinese H-shares listed in Hong Kong fell 1.12% to 6,367.53 points, while the Hang Seng Index was down 1.02% at 17,844.89 points.

• The smaller Shenzhen index was down 1.47%, the start-up board ChiNext Composite index was weaker by 0.61% and Shanghai’s tech-focused STAR50 index was down 1.04%.

• Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.92% while Japan’s Nikkei index was up 0.46%.

• The yuan was quoted at 7.2616 per US dollar, 0.01% weaker than the previous close of 7.2609.