China shares closed down nearly one percent on Monday, as steel counters extended losses amid lingering fears over Beijing's economic-cooling steps and persistent talk of a giant stock offer by PetroChina.
The benchmark Shanghai composite index, grouping foreign-currency B shares and local-currency A shares, fell 0.94 percent to 1,373.217 points.
Baoshan Iron and Steel Co Ltd, China's top steel maker and the world's fourth most valuable steel maker, was one of the most active counters. Its A shares, open to Chinese and select foreign investors, fell 1.9 percent to 6.26 yuan.
Another index heavyweight Maanshan Iron and Steel Co, dropped 2.1 percent to 4.19 yuan.
The steel sector has borne the brunt of the market slump as it has been targeted by Beijing as an industry that has shown obvious signs of overheating.
"There's little sign the market will be able to reverse its weakness in the near term due to lingering fears over government measures to cool the economy and the expected PetroChina stock offer," said Shanghai Securities analyst Zheng Weigang.
The key index has lost 23 percent since early April, when fears first arose that Beijing's efforts to slow its speeding economy, including imposing curbs on credit, would hurt corporate profits.
More recently, repeated talk of an imminent A share offer by PetroChina, China's top oil company, has hit the market, although a company spokesman told Reuters in late July the firm had no timetable for such a plan.
On Monday, China's top-listed coal producer Yanzhou Coal Mining Co was one of the top decliners, falling 6.4 percent to 13.63 yuan on profit-taking.
The stock has gained about 12 percent since early June on soaring coal prices, outperforming a slump on the broader market.
Analysts said the Shanghai index was likely to find support at the psychologically important 1,350-point level this week.
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