Chinese stocks faced a downturn on Monday, with the Shanghai Composite falling by 0.21% to 3,324 and the Shenzhen Component dropping more significantly by 1.91% to 10,544. Despite earlier gains, the market reversed its course, as investors adopted a cautious stance ahead of several key developments.

The decline came even though the Chinese securities regulator introduced new policy guidelines aimed at boosting shareholder returns. These guidelines encourage listed companies to consider measures such as mergers and acquisitions, employee stock incentive programs, cash dividends, and share buybacks to increase shareholder value. While these steps are seen as supportive of market sentiment, the response was muted as investors weighed the broader economic context.

Further adding to the cautious mood was the anticipation of China's upcoming LPR (Loan Prime Rate) decision, which is scheduled for later this week. The market is widely expecting that the one-year LPR will remain unchanged at 3.1%, while the five-year LPR is expected to hold steady at 3.6%. The lack of expected movement in these key interest rates has led investors to adopt a wait-and-see approach as they anticipate future policy developments.

Several prominent companies within the Chinese stock market faced sharp declines. Seres Group dropped by 5.1%, while 360 Security Technology fell 5.9%, and iFLYTEK saw an 8.9% decline. Other notable decliners included Hithink Royalflush (-2.3%) and Jiangsu Hoperun (-6.6%). The technology and security sectors were particularly hard-hit, reflecting broader concerns about economic growth and market conditions.

As the week progresses, Chinese investors will likely remain focused on the LPR decision and any policy changes from the authorities, as well as developments in the global economy that could further impact sentiment. Despite the new policy measures, the market's cautious stance suggests that it may take time for investor confidence to recover fully.

The Upcoming IPOs in this week and coming weeks are NTPC Green, Lomosaic India, C2C Advanced System, Rajesh Power Services, Rosmerta Digital, Avanse Financial and Nisus Finance.

The Current active IPO are Zinka Logistics Solution (Black Buck), and Onyx Biotec.

For more insights into financial trends , visit our Top News Headlines. You can also explore investment opportunities in the market and apply for upcoming IPOs through our Best IPO to Apply Now section.