Mainland stock markets finished mixed Monday with the Shanghai benchmark hitting a new seven-year high as investors traded in small caps for blue chips.

The Shanghai Composite Index rallied 2.17 percent or 108.78 points to 5,131.88 points Monday. The Shenzhen Component Index fell 1.11 percent or 196.78 points to close at 17,452.31 points.

The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen gained 2.36 percent or 123.20 points to 5,353.75 points.

A total of 2.32 trillion yuan ($373.98 billion) changed hands on the two bourses, up from the previous trading day's 2.30 trillion yuan.

The heavily weighted banking and financial sectors outperformed the markets Monday as investors rushed to build positions on expectations that blue chips will benefit from the inclusion of A shares in MSCI's Emerging Markets Index. MSCI will announce its decision early Wednesday Beijing time.

Bank of China surged by the 10 percent daily limit to close at 5.17 yuan; Bank of Communications Co soared 9.96 percent; and Bank of Beijing Co jumped 9.93 percent.

But ChiNext, the country's NASDAQ-style board for high-tech and emerging start-ups, took a dive. The index plunged 4.67 percent or 181.28 points to close at 3,704.55 points after China's asset management association called on mutual fund managers to refrain from speculative trading.

The warning came after local media blamed mutual funds for contributing to ChiNext's lofty valuations. The board trades at 143 times earnings - a valuation that rivals the tech-heavy NASDAQ at the height of the dotcom bubble.

Global Times - Reuters