China and Hong Kong stocks indexes fell on Monday after the release of worse-than-expected China factory activity survey.

China's blue-chip CSI300 index was down 1.5 per cent, at 2,901.37 points, by the lunch break, while the Shanghai Composite Index lost 1.8 per cent, to 2,688.87 points.

In Hong Kong, the Hang Seng index dropped 0.9 per cent, to 19,511.59 points, while the Hong Kong China Enterprises Index lost 1.5 per cent, to 8,120.48.

China's official Purchasing Managers' Index (PMI) contracted at its fastest pace in almost three-and-a-half years in January, missing market expectations, and marking the sixth consecutive month of factory activity contraction.

A further slide in stocks threatens to trigger an increasing number of margin calls, while an expected regulatory tightening in the bill market also worries investors.

Stocks fell across the board in China, while in Hong Kong, most sectors fell, with the energy shares among the biggest decliners, according to Reuters.

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Source: The Financial Express