Chinese stocks listed in Hong Kong began the week lower as persistent concerns about the health of the property sector offset optimism spurred by signs of stabilization in some other parts of the economy.

The Hang Seng China Enterprises Index slid as much as 1.7% before paring losses. On the mainland, the CSI 300 Index fell to its lowest level this year before trading up 0.2%. A gauge of real estate developers slumped more than 2%. Distressed Chinese developer Country Garden Holdings Co. faces two more tests Monday: an initial deadline to pay dollar bond interest and the end of creditor voting on its request to extend payment on a yuan note.

Monday’s price action comes even as recent economic data has been encouraging and Beijing has taken a series of market measures to revive investor confidence. Still, foreign funds have sold onshore Chinese stocks on a net basis for six straight weeks. Their growing exodus from local assets is diminishing the market’s clout in global portfolios and accelerating its decoupling from the rest of the world.

The CSI 300 measure fell 0.7% on Friday as foreigners sold even after data on retail sales and industrial production for August exceeded estimates.

“Though the economic data showed some recovery, the crux of the issue for the market at present is property, and despite the raft of measures to prop-up sales, the recovery in prices and volumes seems limited to large cities,” said Yang Zhiyong, fund manager at Beijing Gemchart Asset Management Co.

China’s economic slump due to years of Covid restrictions, the crisis in its property market and persistent tensions with the West have weighed on its stock market. The concerns have helped make the “avoid China” theme one of the biggest convictions among investors in Bank of America’s latest survey.

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