Local stocks weaken after markets reopen

Broad drops in several heavily weighted sectors pushed stock markets in Shanghai and Shenzhen into loss territory Monday, the first trading day after the eight-day-long National Day and Mid Autumn Festival holiday.

The Shanghai Composite Index declined 11.75 points, or 0.56 percent, to close at 2,074.42; while the Shenzhen Component Index slumped 1.60 percent, or 139.14 points, to finish at 8,540.08.

Both indices opened below where they ended on September 28 but quickly surged upward as listed travel, hotel and aviation companies gained after reporting brisk business during the Golden Week holiday period. The early jump was soon wiped away by drops in the non-ferrous metal, coal, brewing, media, telecommunication operations and real estate sectors. Further weighted down by later losses in securities, transportation equipment and water supply stocks, the markets spent much of the remaining trading day drifting further below even.

Gold stocks ranked among the trading day's biggest losers Monday, despite strong gains in the days leading up the early October holiday. Henan Yuguang Gold & Lead Co shaved off 4.05 percent to 19.21 yuan ($3.06). Zijin Mining Group, China's biggest gold mining company, surrendered 2 percent to 3.93 yuan.

Chinese property developers also fell broadly Monday. Poly Real Estate Group gave up 2.97 percent to 10.44 yuan, while China Vanke shed 3.20 percent to 8.16 yuan.

Cement stocks largely retreated as well. Anhui Conch Cement Co dived 2.32 percent to 15.61 yuan.

Mainland stocks have further space to drop this week as investors adopt a cautious stance and wait to see what sort of policy supports aimed at the financial markets may emerge from the upcoming 18th National Party Congress of the Communist Party, say analysts.