China stocks close lower as ChiNext dives

Chinese shares closed lower on Monday after the securities regulator unveiled reforms to the initial public offering (IPO) system on Saturday.

The ChiNext Index, tracking China's NASDAQ-style board of growth enterprises, dived 8.26 percent, the worst ever daily decline, to close at 1,253.93 points, with over 200 ChiNext shares hitting the daily drop limit at 10 percent.

The China Securities Regulatory Commission (CSRC) said on Nov. 29 that it will prohibit any backdoor listing from acquiring a shell company on the ChiNext board which now has more than 350 listings.

The benchmark Shanghai Composite Index moved down 0.59 percent, or 13.13 points, to finish at 2,207.37. The Shenzhen Component Index dropped 1.94 percent, or 165.96 points, to close at 8,376.64.

Total turnover on the two bourses increased to 306.3 billion yuan (49.89 billion U.S. dollars) from 229.48 billion yuan the previous trading day.

Almost 400 stocks dropped by 10 percent on Shanghai and Shenzhen, including the ChiNext board shares' dire performance.

Bucking the trend, the shares of security dealers, banks, insurance and electricity performed strongly. China Merchants Securities rose 10 percent and Bank of China climbed up 2.14 percent to 2.87 yuan per share.

The country's two oil giants, Sinopec and China National Petroleum Corporation performed well, both up over 4 percent, which helped prevent the two bourses from declining further.