Stocks drop on concerns about competition for funding

Stock markets in the Chinese mainland dropped on Monday amid concerns that a possible resumption of IPOs could curb funding for existing stocks.

The benchmark Shanghai Composite Index declined by 31.92 points or 1.52 percent to 2,065.83 points on Monday.

The Shenzhen Component Index fell by 102.14 points or 1.37 percent to close at 7,353.60 points.

Combined turnover on the two bourses on Monday was 175.45 billion yuan ($28.17 billion), up from the previous trading day's 150.04 billion yuan.

Monday's fall came after the news over the weekend that the China Securities Regulatory Commission (CSRC) had revealed on its website 28 draft prospectuses for companies to get listed. This raised expectations of new IPOs, which could increase competition for investment in the mainland stock market.

Sixteen of the companies on the list are applying for the Shanghai Stock Exchange, eight for ChiNext and four for Shenzhen's small and medium-sized enterprises board, according to data released Saturday on the CSRC website.

Hit by the news, the securities sector fell by almost 3 percent on Monday.

Sinolink Securities Co declined by 5.37 percent to 19.74 yuan and CITIC Securities Company fell by 3.96 percent to 11.39 yuan.

Stocks in the transportation and aviation sectors also declined on Monday, falling by 2.74 percent and 2.61 percent, respectively.

Chinese Premier Li Keqiang said on Sunday that China will launch a series of energy projects, including new nuclear power projects in eastern coastal regions and hydro power projects, local media reports said.

Energy stocks were relatively strong during trading but they saw only limited gains by the close.

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, fell by 13.57 points or 0.99 percent to 1,363.85 points on Monday.