Stock markets in Shanghai and Shenzhen fell Monday as the weak trading sentiment seen Friday carried over into a new trading week.

The Shanghai Composite Index dropped 7.27 points, or 0.35 percent, to close at 2,058.94; while the Shenzhen Component Index lost 0.46 percent, or 38.30 points, to finish at 8,376.56.

Both indices opened lower in the morning and sank in early trading as home appliance and rare earth stocks took losses. Advances in the papermaking and gold sectors supported a modest rebound as the afternoon approached. Broad falls in securities and insurance shares later in the day wiped away the earlier gains, dragging both indices below even by the end of trading.

Papermaking stocks rallied hugely. Zhejiang Kan Specialties Material Co climbed to the daily limit to end at 5.25 yuan ($0.84) per share.

Gold and related shares also performed well Monday. Lao Feng Xiang Co, a jewelry maker, added 2.98 percent to close at 20.72 yuan. Shandong Gold Mining Co went up 1.17 percent to 37.96 yuan.

On the downside, Chinese brokerages fell roundly. Shanxi Securities Co Ltd slumped 2.77 percent to 7.72 yuan. CITIC Securities Co dived 2.27 percent to 10.75 yuan.

China's official manufacturing purchasing managers' index (PMI), a major gauge of factory activity, for October is scheduled to be released the coming Thursday and analysts say a reading over 50 may spark a renewed wave of investor confidence at mainland exchanges.

Last week, a preliminary manufacturing PMI from HSBC came in at 49.1, still below the 50 point mark.