Shanghai - Chinese small-cap shares tumbled, leading the market lower, amid concerns about tougher regulations and more initial public offerings (IPO) following a high-level conference over the weekend attended by President Xi Jinping.
The ChiNext gauge of mostly technology companies sank 5.1% at the close to their lowest level since January 2015. The Shanghai Composite Index dropped 1.4%.
President Xi said the central bank will play a stronger role in defending against risks, and called for more work on safeguarding the financial system and modernising its regulatory framework. The regulator approved nine IPOs for a second week in a row on Friday.
Data released Monday showed China’s economy grew a faster-than-expected 6.9% in the second quarter from a year earlier.
The weekend meeting has got investors worried about tighter rules in the financial market, said Zhang Gang, Shanghai-based strategist at Central China Securities. “People are rushing to cut risks. ChiNext companies got hurt most from such risk-off sentiment, as many ChiNext firms are highly leveraged.”
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories