Asian stocks fell on Monday, with the mainland and Australia leading the losses, as concerns about a slowdown in the world's second-largest economy offset Friday's positive lead from Wall Street.
Data released over the weekend showed further signs of distress in China's property market. Prices rose 6.7 percent in April from a year ago, down from a 7.7 percent gain in the previous month. Additionally, Beijing announced new regulations for interbank lending late on Friday in an attempt to crack down on shadow banking.
"The fear is that the glut of housing supply in tier-3 cities could morph into a domino effect from cash-stretched developers to over-exposed bank balance sheets. For now, the sense is that China's property market is only cooling (albeit a tad faster in some regions); not crashing. Thus the worst fears should be kept at bay," said Vishnu Varathan, senior economist at Mizuho Bank.
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