SHANGHAI (May 23): Chinese stocks closed down on Monday (May 23) as Beijing reported 99 new Covid-19 cases, the highest daily tally in the capital during the current outbreak, while profit-taking after two straight weeks of gains also weighed on benchmarks.

The blue-chip CSI 300 Index fell 0.6% to 4,053.98, while the Shanghai Composite Index was almost flat at 3,146.86 points.

The Hang Seng Index fell 1.2% to 20,470.06, while the China Enterprises Index lost 1.4% to 7,022.45 points.

"There was some resistance after the Shanghai Composite benchmark rebounded more than 200 points from a recent trough," said Zhang Yanbing, an analyst with Zheshang Securities.

"There are still some challenges in the market, and more positive fundamental catalysts are needed for further gains," CICC said in a note.

Investors should closely monitor fundamentals as China's Covid-19 situation improves, including the real estate sector and consumer demand, CICC said.

Real estate developers slumped 3.8% to lead the decline, tourism firms and liquor makers both lost more than 1.5%, while non-ferrous metal and automobiles both climbed more than 2%.

Chinese regulators said last Friday they will streamline the process of equity and bond issuance by companies hit by the pandemic, and urged brokerages and fund managers to channel more money into virus-hit areas and sectors.

Chinese healthcare firms with monkeypox-related business jumped as the World Health Organization says it expects to identify more cases of the disease, even though China had not reported any monkeypox cases.

Broader Asian stocks also came under pressure as investors worried inflation and rising interest rates would darken the outlook for the global economy.

Geopolitics-wise, China’s Foreign Ministry said the US should not defend Taiwan independence after US President Joe Biden said Washington would defend Taiwan militarily if Beijing invades the self-governed island.

Tech firms listed in Hong Kong lost 2.5%, with e-commerce giant Alibaba and food-delivery giant Meituan both slipping more than 3%.

Shares in Orient Overseas and China Hongqiao Group jumped more than 6% each as they will be added to the Hang Seng benchmark.