SynopsisChinese and Hong Kong stocks declined as weak economic data highlighted a fragile recovery, while new measures to reform China’s housing presale system triggered a sharp selloff in property shares. Gold stocks also weakened after hawkish Fed signals, while strong first-half earnings from major banks offered some support.AgenciesChina stocks slip as weak data and property woes weigh.China and Hong Kong stocks declined on Monday as fresh economic data pointed to persistent weakness and imbalances in the world’s second-largest economy, while new measures aimed at reforming the housing presales system triggered a selloff in property shares.The blue-chip CSI300 index fell 0.8% by midday, while the Shanghai Composite Index slipped 0.2%. In Hong Kong, the Hang Seng Index was down 0.7%.China factory activity remains weakOfficial data released on Monday showed China’s manufacturing activity improved in August, supported by stronger demand, but remained in contraction for a second consecutive month. At the same time, services and construction activity stayed subdued, highlighting uneven momentum across the economy.The data reinforced concerns that China’s recovery remains fragile and could require additional policy support to sustain growth. Reuters reported that economists expect Beijing to consider further measures later in the year as risks to meeting its annual growth target become more pronounced.Read more: Global Market: Japan's Nikkei falls nearly 2% as rate hike expectations weigh on sentimentProperty shares slide on presale overhaulMarket sentiment was also pressured by a sharp decline in property stocks after China introduced measures on Friday aimed at reducing developers’ reliance on funds raised through housing presales.The proposed overhaul threatens to disrupt a financing model that has long been central to China’s property market. Presales still represented about 75% of new-home sales at the end of 2025, meaning changes to the system could have significant consequences for developers and housing construction.An index tracking mainland-listed real estate companies fell 1.4%, while Hong Kong’s Hang Seng Mainland Properties Index dropped nearly 6%.The changes could intensify pressure on private developers, which have already faced severe liquidity constraints following the property sector’s prolonged downturn. Banks may also become more inclined to favour state-owned developers, potentially widening the financing gap between state-backed and private companies.Gold stocks weaken after hawkish Fed signalsChina’s gold-related stocks also came under pressure after hawkish comments from Federal Reserve Chair Kevin Warsh on Friday triggered a selloff in bullion.The decline in gold prices weighed on companies linked to the precious metal, adding another source of pressure to the broader Chinese market.Banks offer some supportChinese banking stocks provided a counterweight to the weakness elsewhere in the market. The country’s largest banks reported their strongest first-half profit performance since the height of the property crisis, helping lift investor sentiment toward the sector.The stronger bank earnings offered some reassurance about the resilience of major financial institutions despite continued stress in the property market and uneven economic growth.Overall, Monday’s market moves reflected growing concerns over China’s uneven recovery, with weak services and construction activity, continued property-sector stress and uncertainty over the outlook for policy support weighing on sentiment. Reuters reported that investors remain focused on whether Beijing will introduce further measures to support growth as the year progresses.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. 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