** The blue-chip CSI300 index fell 0.9% to 5,232.12, while the Shanghai Composite Index lost 0.5% to 3,580.11.
** Falling the most, the CSI300 consumer staples index dropped 3.4%, while the CSI liquor index tumbled as much as 8.2% before ending down 6.9%.
** Anhui Yingjia Distillery, Sichuan Swellfun , Hebei Hengshui Laobaigan Liquor, Jinhui Liquor and Anhui Golden Seed Winery all slumped by their 10% daily trade limits.
** Top liquor maker Moutai closed down 3.5%.
** The retreat came as the liquor index neared its record high hit in mid-February, and after the index gained 12% and 12.5% in May and April, respectively.
** “The price-to-earnings ratios of liquor makers, not including Moutai and Wuliangye, have reached more than 60 overall, which is way too high despite improvements in their fundamentals,” said Yan Kaiwen, an analyst with China Fortune Securities.
** Yan said liquor stocks would face a big correction going forward.
** Meanwhile, U.S. President Joe Biden’s order last week banning U.S. investment in certain Chinese companies is broader than a similar one signed by his predecessor Donald Trump and has a lower bar, making it easier to add more companies later.
** U.S. Secretary of State Antony Blinken on Monday signalled that a possible resumption of trade and investment talks with Taiwan stalled since the Obama administration, but gave no indication of any willingness to pursue a full-scale trade pact that Taipei has been seeking.
** Bucking the broader weakness, Chinese EV maker BYD Co Ltd and battery maker CATL gained ground on a report of Apple supply talks. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Devika Syamnath)