Chinese stocks on Monday slumped to the lowest point since March 2009, as institutional investors dumped shares amid intensified fears of an economic slowdown.[Hong Kong Company Formation & Registration]

The benchmark Shanghai Composite Index fell 1.74 percent, or 36.40 points, to close at 2,055.71. The Shenzhen Component Index closed at 8,402.15, down 2.06 percent, or 177.13 points.

Combined turnover on the two bourses shrank to 102.7 billion yuan (16.3 billion U.S. dollars) from 109.27 billion yuan on Friday.

Jitters were aroused by a number of fund investors' moves to cut their stock holdings last week as well as a new batch of shares that will conclude their lock-up period, adding more liquidity to dilute market sentiment, dealers said.

Greater declines in industrial profits and the falling purchasing managers' index compiled by HSBC Corp. underlined fears of a slowing economy and weighed on investors' sentiments.

Securities brokers fell by 5 percent, as their profit margins will be affected by less active trading after billions of shares are pumped into the market following the end of the lock-up periods.[company registration in Hong Kong, Hong Kong company incorporation]

Citic Securities, China's largest securities brokerage by asset value, slumped 5.3 percent to 10.19 yuan. Guangfa Securities tumbled by the daily limit of 10 percent.

Coal producers extended losses, as the slowing economy is expected to sap demand for raw materials. China Shenhua Energy Co., the country's largest coal producer fell 2.6 percent to 21.36 yuan. China National Coal Group Corp shed 3.72 percent to 6.98 yuan.

Meanwhile, the environmental protection sector reversed the trend to gain on the back of the National Development and Reform Commission's plans to set up an investment fund for the industry. Tianli Group, a leading industrial waste disposal company, increased 7.49 percent to 13.2 yuan. Hunan Yongker Environmental Protection Co., Ltd gained 3.83 percent to 28.75 yuan.