HONG KONG: Hong Kong stocks fell more than 1% on Monday, dragged down by losses in the financial sector, as investors worried over rising US-China tensions. The Hang Seng index fell 1.2% to 26,506.85, while the China Enterprises Index lost 1.4% to 10,473.32 points. Leading the decline, the Hang Seng financials index fell 1.7%.

The Hang Seng financials index rose 15% in November, buoyed by China's continued economic recovery and progress on a Covid-19 vaccine. The United States is preparing to impose sanctions on at least a dozen Chinese officials over their alleged role in Beijing's disqualification of elected opposition legislators in Hong Kong, according to three sources, including a US official, familiar with the matter.

The news came after the United States on Thursday added China's top chipmaker, SMIC, and oil giant CNOOC to a blacklist of alleged Chinese military companies.