At close of trade, the benchmark Shanghai Composite Index declined 1.2%, or 37.14 points, to 3,051.23. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.75%, or 14.69 points, to 1,949. The blue-chip CSI300 index decreased by 0.5%, or 19.34 points, to 3,836.68.

Shares in energy and resource companies slumped on concerns of falling demand in a global recession.

Tourism-related stocks and liquor makers went up after Macau's leader said China would resume an e-visa scheme for mainland travellers and permit group tours, which could likely boost the footfall in the world's biggest gambling hub.

CURRENCY NEWS: China's yuan was little changed against the dollar on Monday despite central bank steps announcement to slowdown pace of yuan depreciation.

China's central bank on Monday announced fresh steps to slow the pace of the yuan's recent depreciation by making it more expensive to bet against the currency, as global policymakers grappled with the economic effects of a broad dollar rally. The People's Bank of China (PBOC) said it would raise the foreign exchange risk reserves for financial institutions when purchasing FX through currency forwards to 20% from the current zero, starting on Sept. 28, to stabilise FX market expectations and strengthen macro prudential management.

Prior to market opening on Monday, the PBOC set official guidance at 7.0298 per dollar - the weakest level since July 7, 2020. The onshore yuan CNY=CFXS traded at 7.1503 per dollar as of 0720 GMT, versus the previous late night close of 7.1298 on Friday.

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