(Bloomberg) -- Chinese stocks slid on Monday amid some profit-taking following their sharp recent gains and as general caution prevailed in equity markets ahead of global central bank meetings.

The Hang Seng China Enterprises Index slipped 3% following a 7.3% jump last week, with technology stocks such as Meituan and Alibaba Group Holding Ltd. being the biggest drags. Most Asian markets fell as traders awaited key US inflation data and interest-rate decisions from the Federal Reserve and the European Central Bank later in the week. 

Investors are taking some money off the table after optimism over reopening spurred a quick surge in Chinese markets. Chaos unfolding on the ground as cities rapidly dismantle Covid restrictions — with infections surging and hospitals getting overwhelmed — appears also to be tempering short-term expectations over further gains. 

READ: Covid Surge Sparks Turmoil in China’s Poorly Prepared Hospitals 

“It does look like profit taking after a strong run as most are expecting that reopening won’t be that straightforward or immediate,” said Christina Woon, investment director of Asian equities at abrdn.

China’s onshore benchmark CSI 300 Index closed down 1.1%, while Hong Kong’s Hang Seng Index fell 2.2%. A gauge of Chinese tech stocks listed in the Asian financial hub slumped 4.1%.   

Country Garden Services Holdings Co. was the top loser on the Hang Seng China gauge, plunging 17% after Chairman Yang Huiyan agreed to sell a stake.  

Meanwhile, Chinese airlines and travel-related shares traded largely higher in Monday’s session. Reopening is expected to be the dominant theme for the market in the new year, with many global investors citing it as the key reason to be bullish on local stocks.  

About 60% of respondents in a Bloomberg News survey of the world’s top money managers recommended buying the country’s stocks, while 31% said they are a sell. 

While optimism prevails for 2023, most investors expect the market to go through ups and downs as China adjusts to the pandemic paradigm shift. 

The loosening of restrictions has resulted in scenes of disruption across Beijing, with fever medicine in short supply and delivery services interrupted as couriers fall sick. More of those may play out nationwide over the next few weeks.  

READ: China Markets Are Primed for Extreme Volatility in 2023

“I would be more worried if there is no profit taking as the market would be overheated,” said William Fong, head of Hong Kong China equities at Baring Asset Management (Asia) Ltd. “So it is a healthy correction.”    

--With assistance from Jeanny Yu.

©2022 Bloomberg L.P.