Chinese shares opened lower on Monday, affected by a government decision over the weekend to resume initial public offerings (IPOs) in the domestic stock market.
The benchmark Shanghai Composite Index was down 1.63 percent to 2,555.34, and the Shenzhen Component Index dropped 2.1 percent to 9,861.36 at the opening.
As of 10:30 a.m., shares of Shanghai Stock Exchange dropped 1.49 percent, while those on the Shenzhen market were down 1.17 percent.
While IPOs could bring liquidity pressure to the market, the decision reflected the demand for capital and was necessary for the healthy growth of China's stock market, said Chen Zili, analyst with Jinzheng Consulting.
The China Securities Regulatory Commission (CSRC) said Friday it would lift a de facto suspension of IPOs on the Shanghai and Shenzhen stock exchanges as of June 5.
The CSRC effectively suspended all new stock issues in September last year, when it halted approvals. Since then the stock market has plunged 63.9 percent from its peak 6124.04 in October 2007.
Source: Xinhua
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