The Hang Seng Index dropped 0.8 per cent to 16,201.49 at the closing of Monday trading, the lowest level since early November last year. The Tech Index lost 1.1 per cent while the Shanghai Composite Index gained 0.7 per cent.

Meituan lost 3.5 per cent to HK$83.60, Alibaba Group declined 2.1 per cent to HK$69 and e-commerce peer JD.com tumbled 6.3 per cent to HK$98.25. Electric-vehicle maker BYD lost 1 per cent to HK$208.60 while Macau casino operator Galaxy Entertainment slipped 1.8 per cent to HK$41.15.

“Deflation is already pervasive in the Chinese economy,” Arthur Budaghyan, chief China strategist at Montreal-based BCA, said in a note last week. “As long as deflation lingers and common prosperity policies are not abandoned, low equity multiples represent a value trap rather than an attractive buying opportunity.”

02:29

External factors risk for Hong Kong ahead in coming year, finance chief warns

External factors risk for Hong Kong ahead in coming year, finance chief warns

The Fed’s rate-setting committee meets on Wednesday. Policymakers are expected to maintain the target for fed funds rate at 5.25 per cent to 5.5 per cent, according to data compiled by CME Group based on contracts on Fed fund futures.

Major Asian markets were stronger on Monday. Japan’s Nikkei 225 climbed 1.5 per cent and Australia’s S&P/ASX 200 added 0.1 per cent, while Korea’s Kospi index added 0.3 per cent.