“The market was in panic because of a slew of news in the morning, the most significant being the arrest of an official at Saudi Aramco,” said Castor Pang Wai-sun, head of research at Core Pacific-Yamaichi.

A board member of Saudi Aramco, the world’s largest crude oil producer, was taken into custody in an anti-corruption campaign in Saudi Arabia on Sunday. The company is seeking to list at a valuation of US$100 billion, potentially the world’s largest flotation, and Hong Kong’s bourse is among the destinations it is considering.

The benchmark Hang Seng Index retreated as much as 1.4 per cent, or 456.43 points in mid-morning trading before paring losses.

“Most transactions happened when the Hang Seng Index was recovering from losses,” said Pang.

Mainland Chinese banks declined broadly as concerns over tougher regulations mounted. Zhou Xiaochuan, governor of the People’s Bank of China, over the weekend set out his strategy to prevent a future financial crisis by calling for broadened equity funding and direct finance to reduce corporate leverage and eliminate “zombie” companies.

Industrial and Commercial Bank of China dropped 1.4 per cent, China Construction Bank lost 1 per cent, and Bank of China fell 0.5 per cent.

Property developers also retreated, as the market turned bearish on November sales, Pang said. Concerns over more tightening measures by Beijing on the property market also weighed shares down, he added.

Sunac China Holdings, one of the country’s most indebted developers, tumbled 6.9 per cent, despite posting a 193 per cent year on year jump in October in contracted sales value.

Sun Hongbin, the chairman of Sunac, defended his 15 billion yuan (US$2.3 billion) bailout of LeEco group at an public event on Sunday, saying it was too early to tell whether his investments had failed in the company troubled by news of leaving executives and accounting fraud recently.

China Evergrande Group fell 3.3 per cent, Country Garden Holdings declined 2 per cent, and China Overseas was down 1.2 per cent.

Internet giant Tencent Holdings lent support to the market, rising 2.5 per cent for the seventh straight session to hit a record high of HK$377, contributing 78 points to the Hang Seng Index.

Investors have raised expectations of its performance ahead of its quarterly earnings release on November 15, Pang said. Morgan Stanley also lifted its target price for the stock by 14 per cent to HK$420.

Energy producers also shone, boosted by a rally in crude oil prices. The benchmark Brent crude oil price has jumped 12 per cent from a month ago.

PetroChina, the nation’s largest oil and gas producer, climbed 3 per cent. CNOOC, the largest offshore oil producer, was up 1.5 per cent.

AAC Technologies Holdings soared 10 per cent to HK$153.7 after Bank of America Merrill Lynch raised the stock’s target price of the Apple parts supplier significantly from HK$73 to HK$156.

On the mainland, the Shanghai Composite Index rose 0.5 per cent, or 16.43 points, to 3,388.17. The CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – gained 0.7 per cent or 28.19 points to 4,020.89, and the Nasdaq style ChiNext was up 1 per cent, or 17.34 points, at 1,850.30.

Other Asian markets were lower on Monday. Tokyo’s Nikkei 225 fell a marginal 0.04 per cent to 22,548.35. South Korea’s Kospi fell 0.3 per cent and the Sydney All Ordinaries was little changed.

All three major US indices rose to intra-day record highs on Friday, with the Nasdaq Composite finishing 0.7 per cent higher at 6,764.44 after a jump in Apple because of robust initial demand for its new iPhone X. The Dow Jones Industrial Average inched up 0.1 per cent to 23,539.19, while the S&P 500 rose a modest 0.3 per cent to 2,587.84.