China's stock market closed slightly higher on Monday as the China market watchdog issued new policy for share trading.
The Shanghai Stock Exchange composite Index (SSE) gained 22.31 points, or 0.72 percent, to reach 3116.98. The index opened higher in the morning, rising 210 points, or 6.8 percent to reach 3305.15. Stocks then tumbled to reach 3073.56, not only swallowing all the gains but also marked a new lowest-record since last March, at last it rebounded slightly.
The Shenzhen Stock Exchange component index fell 1 percent to reach 921.72 points.
The China Securities Regulatory Commission (CSRC) on Sunday evening said that shareholders that want to sell large numbers of shares newly freed from lock-up periods must do so through the block trading system.
Both Shanghai and Shenzhen Stock Exchanges welcome the news with huge higher opening on Monday morning, but tumbled.
Analysts said the higher opening reflected the institutional and individual investors' recognition of the stimulate policy.
At first the investors believed that it's good news, but then their mind changed after they studied and understood the policy, said Wang Junqing, the strategy analysts of Guosen Security.
One reason is that investors gradually discovered the policy has 'big loophole' to be implemented. Wang added.
The rule, which applies whenever more than 1 percent of a listed firm's total shares are sold within a month, is expected to slow trading of such shares as they become tradable after initial public offerings or shareholding reform lockup periods, analysts said.
Analysts said taking into account the fluctuations of Monday, the benchmark index is expected to fluctuate between 3000 to 3300 points in the remaining time of this week.