Stock market grows, small-cap shares lose

Chinese shares continued a heavyweight-led gaining streak on Monday with the benchmark index hitting a new record, but with small-cap stocks suffering.

The Shanghai Composite Index gained on Monday, closing 0.61 percent higher at 3,127.45, a new high in nearly 50 months.

Total turnover also remained high, with combined transaction volume on the two bourses valued at 932.27 billion yuan (152.33 billion U.S. dollars).

However, a surprisingly large number of small-cap stocks slumped by the daily changing limit.

Shares of 276 companies listed on the Shanghai and Shenzhen stock exchanges lost around 10 percent, the biggest daily decline allowed in China's stock markets, and 1,249 firms dropped by over 5 percent, a rare phenomena amid the current bullish run.

A research note from Wlstock.com attributed the decline partly to a cash crunch -- over 2 trillion yuan was frozen for new share subscriptions -- and partly to authorities' hard action to stock manipulation.

China Securities Regulatory Commission, the country's top stock regulator, announced on Friday that it was investigating market-rigging involving shares of 18 listed companies.

Meanwhile, heavyweights, including banks and brokerages, led the rise. Bank of China surged 9.89 percent to finish at 3.89 yuan per share and Everbright Securities gained over 5 percent to close at 26.75 yuan apiece.

The Shenzhen Stock Exchange closed at 10,608.51 points, down 0.18 percent, while the ChiNext Index, China's Nasdaq-style board of growth enterprises, plunged 4.94 percent to finish at 1,517.93 points.