On Monday, a plurality of sub-new stocks plunged by daily limit following stricter regulations. The performance of Xiong'an shares is divided, with many dipping to down limit. Elsewhere, defense stocks and gold stocks have recovered some of their losses. Despite the support of industrial and banking issues, the major share index dropped significantly after a broad-based selloff.

At the close of trading, the Shanghai Composite was 0.74% lower at 3222.17 points and Shenzhen Composite 1.41% lower at 1958.55 points. However, the trading volume did not expand, indicating institutional investors haven't sold too much.

Apparently, sub-new stocks were hit hard yesterday, with 70 issues plunged to daily limit and 90 registered losses of over 9%, which surprised me quite a lot. Maybe I undervalued the impact of regulators' resolution to combat manipulation.

Recently, investors seemed a bit skittish since sub-new stocks, shell resource, and high-dividend stocks are under stricter scrutiny. This may result in Monday's selloff.

I am cautious about its future performance, but I believe it won't fall all the time. As long as the Shanghai Composite stays above 3190 points, it is hopeful.  

(Zheng Buchun is NBD's columnist)

Email: tanyuhan@nbd.com.cn