Hong Kong, China stocks drop amid commodity price rout, signs of China economic weakness

Hong Kong's share benchmark tumbled more than 2% on Monday while Shanghai stocks headed for their worst ‌day in two months as a global rout in commodity prices hit sentiment across Asian markets. Risk appetite was also ⁠hurt by China's disappointing manufacturing activity data and deteriorating fiscal revenue growth.

Hong Kong's Hang Seng Index dropped 2.4% by the lunch break, as commodity-related stocks suffered brutal sell-offs. In China, ​the blue-chip CSI300 Index lost 1.1% while the Shanghai Composite Index declined 1.3%.

Commodity-related ‍stocks led the declines as global metal prices corrected sharply following recent surges. An index tracking China's non-ferrous metal stocks lost 6.3%.

China's CSI SSH Gold Equity Index tumbled more than 8% in the ⁠morning session, ‌following Friday's 9% ⁠plunge. Shares of listed gold miners, including Sichuan Gold Co , Shanjin International Gold Co and Zhaojin International ‍Gold, all fell by 10%, the most allowed for the day.

In Hong Kong, the ​Hang Seng Materials Index slumped more than 5%. Sentiment was also soured by an ⁠official survey showing China's factory activity faltered in January as weak domestic demand dragged down production at ⁠the start of the new year.

These disappointing outcomes, "coupled with deteriorating fiscal revenue growth and a sharp contraction in auto sales, lends additional support to our view ⁠of a demand cliff," Nomura chief China economist Lu Ting said. Shares fell across the ⁠board in Hong ‌Kong, with biotech , chipmaking and telecom stocks among the worst performers.

In China, market losses were partially offset by gains ⁠in liquor, consumer and financial stocks .