Stocks plunge by most in one month as financial firms fall

An investor looks at the Shanghai Composite Index at a brokerage house in Jiujiang, Jiangxi province, Dec 28, 2015. [Photo/IC]

Stocks fell the most in a month on Monday, as market sentiment ebbed when a gauge of the country's dollar-denominated B-shares plunged nearly 8 percent.

The benchmark Shanghai Composite Index closed at 3,533.78 on Monday, down 2.6 percent, while the Shenzhen Component Index slid 2.3 percent to 12,686.34.

Financial firms led the loss. China Life Insurance Co, the country's largest insurer, dropped 3.7 percent, and China Pacific Insurance 3.8 percent. Five brokerages - CITIC Securities, Huatai Securities, Shanxi Securities, Merchants Securities and Northeast Securities - tumbled more than 5 percent.

A gauge of banking sector slumped 3.6 percent on Monday, with Nanjing Bank, CITIC Bank and Ningbo Bank sinking 5 percent. Beijing Bank and Huaxia Bank fell more than 4 percent.

The Shanghai index is the best-performing major global index this quarter as government intervention to halt a $5 trillion equity rout helped stabilize the stock market, reported Bloomberg, while adding that investors are concerned with industrial profits decline.

China's top leadership announced an overarching plan to lead the economy's ongoing transition during the Central Economic Work Conference earlier this month.

According to an official statement released after the meeting concluded on Dec 21, the government will make fiscal policy more forceful and monetary policy more flexible to keep growth within a proper range in 2016, while pushing up structural reform on the supply side.

In the economic blueprint for 2016, the country vowed to "add new supply, create new consumption and form new growth momentum" through innovation in institutions, technology and products.

The country also seeks to launch a registration-based initial public offering (IPO) system in March next year, under which IPO supply and timing would be decided by companies and the market.

The CSI 300 index tumbled 2.9 percent on Monday to close at 3,727.63.