* SSEC -2.5 pct; CSI300 -2.4 pct; HSI -1.4 pct
* Insurers pull back from stock markets
* Trump's questioning of "one China" principle rattles HK
(Adds detail, quotes, context)
SHANGHAI, Dec 12 China stocks suffered their
biggest drop since June to hit a one-month low on Monday, as
fresh regulatory curbs were put on trading by insurance
companies and worries about incoming U.S. president Donald
Trump's China policy rattled investors.
The downbeat mood spread to Hong Kong, where investors were
already cautious ahead of a likely U.S. interest rate increase
In mainland markets, analysts said investors were spooked by
an announcement by the country's insurance regulator late on
Friday that it had suspended Evergrande Life, the insurance arm
of China Evergrande Group, from conducting stock
market investments due to its speculative, frequent, high-volume
The blue-chip CSI300 index fell 2.4 percent to
3,408.58 points, and the Shanghai Composite Index lost
2.5 percent to 3,152.47 points.
"The market dropped because several insurers are not allowed
to buy stocks. This has changed investors' expectations," said
David Dai, Shanghai-based investor director at Nanhai Fund
Also late on Friday, Foresea Life Insurance, a unit of
Baoneng, said that it would not further boost its stake in Gree
Electric Appliances Inc of Zhuhai. Gree shares,
which had surged by Forsea Life's aggressive stake-building,
plummeted more than 6 percent on Monday.
Other companies favoured by insurers, including China Vanke
Co Ltd, China State Construction Engineering Corp
Ltd and Poly Real Estate Group Co Ltd,
also saw their shares tumble.
U.S. President-elect Donald Trump's rhetoric calling into
question the United States' long-standing position that Taiwan
is part of "one China" and broader questions about
his protectionist agenda were seen by some analysts as dragging
down shares in Hong Kong.
The benchmark Hang Seng index dropped 1.4 percent, to
22,433.02 points, while the Hong Kong China Enterprises Index
lost 1.7 percent, to 9,699.31 points.
"You can sense the nervousness...the big caps got hit quite
early today, and I think it's related to Donald Trump," said
Alex Wong, Hong Kong-based director at Ample Finance Group. Wong
added that there was concern about retaliatory action from
China, a major holder of U.S. government debt.
The bourse's large cap sub-index fell 1.5 percent on
Monday, while the small cap and mid-cap
sub-indexes both fell around 2 percent.
Others said the Trump factor was not large. Linus Yip,
strategist at First Shanghai Securities Ltd, said Hong Kong
stocks were pulled down by mainland markets.
"The market is awaiting new policies from Trump after he
takes office, which makes investors more cautious. It's not easy
to measure the influence now. I think the main reason for today
was the slump in mainland peers," he said.
Nearly all sectors lost ground in both China and Hong Kong.
Zhang Qi, analyst at Haitong Securities in Shanghai, said
year-end profit-taking was also a factor in the mainland
Energy suffered the least in China and Hong Kong, thanks to
an oil price surge in the morning after OPEC and other
producers reached their first deal since 2001 over the weekend
to jointly reduce output.
(Reporting by Jackie Cai, Samuel Shen and John Ruwitch in
SHANGHAI, and Jessica Macy Yu in HONG KONG; Editing by