China stocks mixed after approval of major IPO

Chinese shares were mixed Monday amid fears the year's biggest initial public offering might depress the market by flooding it with new shares.

The benchmark Shanghai Composite Index shed 33.38 points, or 1.1 percent, to close at 3,080.56 while the Shenzhen Composite Index for China's smaller second exchange edged up 0.4 percent to 1047.07.

Investors were unnerved by the weekend announcement that regulators have approved a 42.6 billion yuan ($6.2 billion) IPO by China State Construction Engineering Corp.

"The China Construction offering was so big that it made investors uneasy," said Zhou Lin, an analyst for Huatai Securities in the eastern city of Nanjing.

Investors also were skittish after Friday's report that Chinese trade fell for an eighth straight month in June, even though the decline was less severe than in May.

"Although the decline of trade narrowed, after all it was a fall," Zhou said.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, fell 1.5 percent to 5.16 yuan. Bank of China Ltd. lost 2 percent to 4.42 yuan, while China Construction Bank Ltd. withered 2.1 percent to 6.03 yuan.

Oil stocks fell after crude dropped below $60 per barrel in Asia.

PetroChina Co., Asia's biggest oil and gas producer, lost 0.9 percent to 14.43 yuan, while China Petroleum & Chemical Corp. gave up percent to yuan.

China Eastern Airlines Corp. and Shanghai Airlines Co. both surged 5.1 percent following an announcement that China Eastern will acquire the smaller carrier. China Eastern rose to 5.60 yuan, and Shanghai Airlines to 6.22 yuan.

In currency markets, the yuan strengthened to 6.8322 to the U.S. dollar, up from Friday's close of 6.8325.