China stocks barely budged on Monday morning, as any optimism felt from data showing surging profits at Chinese industrial firms was offset by fresh property curbs and signs that monetary policy may be further tightened. Hong Kong shares fell, as the market gave a cold welcome to Beijing-backed Carrie Lam, who was elected on Sunday as the city's chief executive. China's blue-chip CSI300 index was unchanged at 3,488.87 points by the lunch break, while the Shanghai Composite Index gained 0.1 percent, to 3,274.01 points. Offering fresh signs of China's economic recovery, profits of Chinese industrial firms surged 31.5 percent in the first two months of 2017 from a year earlier, as commodity prices jumped. Also watch: But a market response was muted by Beijing's fresh measures to ward off asset price bubbles. China introduced rules to curb the purchase of new commercial property in Beijing by individuals in the government's latest step to cool the property market, while the central bank chose not to inject funds into the banking system citing "relatively high levels of liquidity". Underscoring the shift in Beijing's policy focus, Zhou Xiaochuan, governor of the People's Bank of China (PBOC) said on Sunday that he expects to see more countries start to emphasize fiscal policy and structural reform as the period of loose monetary policy ends. Ye Song, fund manager at Chang Xin Asset Management, wrote in an annual fund report on Monday that the market will likely be volatile in the near term as good news co-exists with bad news. On the bright side, listed companies' profitability is improving due to the economic recovery, and equities are a better investment than bonds and property amid the government's deleveraging campaign, he wrote. On the dark side, "interest rates are climbing higher, while the property curbs and deleveraging efforts cast doubt on the sustainability of the recovery, suppressing equity valuations." Most sectors fell on Monday, but transportation and banking stocks were firm. HONG KONG In Hong Kong, the Hang Seng index dropped 0.3 percent, to 24,290.72 points, while the Hong Kong China Enterprises Index shed 0.6 percent, to 10,417.22. Nearly all sectors lost ground, with materials and property shares among the worst performers. China Vanke Co Ltd, the mainland's second-biggest homebuilder, dropped 3.3 percent in Hong Kong after posting 2016 profit that fell short of estimates.