1st LD: Chinese shares dive at opening after holiday break

Chinese shares plunged at opening on Monday, the first trading day of the Year of the Monkey, joining a sweeping downtrend across global capital markets after Chinese shares were closed for the 7-day Chinese New Year holiday.

The benchmark Shanghai Composite Index opened down 2.84 percent, at 2,684.96 points. The smaller Shenzhen index opened 2.98 percent lower at 9,385.52 points. The ChiNext Index, tracking China's NASDAQ-style board of growth enterprises, lost 3.22 percent to open at 2,029.56 points.

Market sentiment turned fragile as global capital markets lost heavily last week with the absence of the Chinese market.

The Asian market was the most battered, with the 225-issue Nikkei Stock Average falling 4.8 percent last Friday and plummeting more than 10 percent during the week.

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite Index were also mired in doldrums last week, losing 1.4 percent, 0.8 percent and 0.6 percent respectively.

"The root cause of the sweeping drops was that economic fundamentals failed to sustain a long bullish market in the West fueled by too much liquidity since 2008," said Ren Zeping, chief macro strategists at Chinese brokerage Guotai Junan Securities. Endit