By Clarence Leong

Shares of Chinese property developers continued to slide Monday as worries mounted that China Evergrande Group is moving closer to a default, signaling the potential for a wider contagion in the sector.

The Hang Seng Mainland Properties Index plunged more than 6.0% on Monday morning, taking year-to-date losses to 33%. Evergrande fell 17% to HK$2.11, while Sunac China Holdings Ltd. slid 10% and Guangzhou R&F Properties Co. fell 7.3%. Property-management companies also tracked lower, with Country Garden Services Holdings Co. retreating 12%.

The selloff has been fueled slowing sales growth and Beijing's tight policy on the sector, which hasn't shown any sign of letting up. Worsening liquidity conditions at Evergrande and other developers who have borrowed heavily have led to downgrades by rating firms.

Evergrande, China's largest junk-bond issuer, said last week that it had hired financial advisers, moving closer to a potential debt restructuring.

Efforts by the Chinese central bank to calm market jitters seem to have done little to halt the sharp downturn among developers. It pumped 190 billion yuan ($29.38 billion) of funds into markets on a net basis over Friday and Saturday via reverse-repo operations, according to data provider Wind.

The property sector's losses have dragged the wider Hang Seng Index lower. It fell as much as 4.2% and was last 3.9% lower at 23955.18, on track for its biggest one-day percentage decline since late July.

Write to Clarence Leong at clarence.leong@wsj.com

(END) Dow Jones Newswires

09-20-21 0034ET