Mainland exchanges hit by concerns over new IPOs

Mainland exchanges declined for a fifth consecutive day on Monday amid investor concerns over a new set of IPOs and weak factory activity.

The benchmark Shanghai Composite Index fell by 2.56 percent or 82.06 points to 3,128.30 points on Monday. The Shenzhen Component Index declined by 1.68 percent or 187.56 points to 10,963.14 points.

The CSI 300 Index of the biggest companies traded on the bourses in Shanghai and Shenzhen dropped by 2.34 percent to 3,353.96 points.

Total turnover on the two bourses on Monday was 466.73 billion yuan ($74.57 billion), down from Friday's 507.94 billion yuan.

The extended decline came after the China Securities Regulatory Commission (CSRC) approved a new round of IPOs for 24 companies late on Friday. Investors are concerned that new listings could divert funds from existing stocks.

Market sentiment was also hit by weak factory activity in China. The official Purchasing Managers' Index (PMI) dropped to 49.8 in January, down 0.3 percentage points from the month before, the National Bureau of Statistics announced on Sunday. It was the first time in two years that the official PMI reading had come in below 50, which indicates contraction.

Banks declined almost 4 percent on average. Bank of China fell by 6.14 percent to 4.13 yuan and China Minsheng Banking Corp - whose president was taken away for an unspecified investigation over the weekend - dropped by 3.17 percent to 9.17 yuan.

Declines for oil, electricity and insurance stocks also weighed on the markets, but IT companies bucked the trend, boosting ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups.

ChiNext closed up by 0.97 percent or 16.25 points at 1,696.83 points.

In Hong Kong, the Hang Seng Index edged down by 0.09 percent to 24,484.74 points, with total turnover of HK$85.18 billion ($10.98 billion).