The Hang Seng Index dropped 1 per cent to 17,391.41 at 11am local time to reach the lowest since November 17. The Tech Index slid 1 per cent, while the Shanghai Composite Index declined 0.7 per cent.

China’s top lender ICBC weakened 1.1 per cent to HK$3.75 while Construction Bank lost 1.1 per cent to HK$4.51. Alibaba Group dropped 1.2 per cent to HK$75.25, Tencent retreated 0.3 per cent to HK$320.20 and Meituan declined 0.9 per cent to HK$108.10. BYD tumbled 4.4 per cent to a three-month low of HK$218.40. The EV maker slashed prices on some older models by up to 10,000 yuan in a promotion campaign.

Chinese lenders came under pressure amid concerns asset quality will suffer after reports suggesting Beijing will ask them to write more loans without collateral backing to help ease liquidity crunches faced by troubled home builders and stem a multi-year industry slump.

It will be difficult for developers to provide corresponding assets as collateral for now, but “offering unsecured loans also imposes significant risks for the banks involved,” according to Wang Yifeng, chief banking analyst at Everbright Securities said in a report.

Meanwhile, a government report today showed industrial profits rose 2.7 per cent in October from a year earlier, the slowest in three months and compared with 11.9 per cent in September. Manufacturing likely contracted in November, according to consensus forecasts by economists.

China urges banks to support property sector, but tide still against private firms

The Hang Seng Index is attempting to chart its first monthly advance since July amid China’s efforts to restore growth. The benchmark has risen 2.6 per cent this month, having lost a cumulative 15 per cent in the preceding three months. Still, Beijing will need to do more to arrest a slide in economic activity, Goldman Sachs said.

Elsewhere major Asian markets traded lower on Monday. Australia’s S&P/ASX 200 declined 0.5 per cent, while South Korea’s Kospi weakened 0.1 per cent and Japan’s Nikkei 225 lost 0.4 per cent.