China stocks gave back some of the previous session's sharp gains on Tuesday, with investors growing skittish about the impact of a new wave of initial public offerings.

Hong Kong stocks also corrected, dragged lower by energy shares after oil prices hit a fresh 11-year low amid concerns of a persistent supply glut.

The blue-chip CSI300 index fell 0.5 per cent to 3,848.61 points by the lunch break, retreating from four-month highs touched on Monday. The Shanghai Composite Index also lost 0.5 per cent to 3,623.56 points.

Blue chips, including banks, property and transportation, were all down on profit-taking, despite market-friendly messages from a key meeting of China’s Communist leadership. Reforms were announced, including plans to make China’s monetary policy more flexible and to expand the government’s budget deficit in 2016.

However, analysts said the policies did not exceed investor expectations, while the imminent source of anxiety was the new batch of eight IPOs this week that some estimated would freeze about 1.7 trillion yuan ($262.5 billion) of liquidity.

Two companies, Beijing Qianjing Landscape Co and Jiangsu Jingshen Salt & Chemistry Industry Co, will take investor subscriptions on Tuesday, while the other six firms will kick off fundraising later this week.

Most sectors fell on Tuesday, although resource shares were firm.

Investors have not given up betting on the next potential acquisition target by insurers though, inspired by the bidding war for control of developer China Vanke Co.

Companies partially owned by insurers, including retailer Dashang Co, developer Gemdale and trading firm Chang Chun Eurasia Group, all rose.

In Hong Kong, the Hang Seng index dropped 0.1 per cent to 21,774.17 points, while the Hong Kong China Enterprises Index lost 0.5 per cent to 9,703.30.

Trading activity in the city appears to be waning as the Christmas break approaches.

The market was weighed down by oil majors, such as PetroChina and CNOOC, which were hit by lower oil prices.

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