Mainland China and Hong Kong equity markets retreated on Tuesday, tracking a broader downturn across Asian bourses.
The Shanghai Composite index declined 0.4%, while the more volatile CSI 300 benchmark suffered a sharper 1.5% loss.
The sell-off reflects growing investor caution as regional peers also posted losses, with Japan’s Nikkei 225 ending an eight-session winning streak by falling 0.9% to close at 71,712 points.
The pressure on Chinese equities is being amplified by shifting expectations regarding US monetary policy.
Traders are increasingly pricing in the possibility of a Federal Reserve rate hike, a development that typically strengthens the US dollar and creates headwinds for emerging market assets.
This dynamic is evident in currency markets, where the Malaysian ringgit weakened against the greenback on Monday, pressured by both geopolitical risks and the changing rate outlook.