Chinese stocks fell for a fifth day, with the benchmark Shanghai index edging down 2.6 percent, after the country's manufacturing gauge in January slid to a 28-month low.

The Shanghai Composite Index closed at 3,128.3 on Monday, down 82.06 points, while Shenzhen Component Index lost 1.7 percent or 187.56 points to 10,963.14.

Financial shares remain soft on Monday, with Guoyuan Securities, Shenwan Hongyuan Securities and China Life tumbling more than 6 percent.

Minsheng Bank fell 3.2 percent after the company announced the resignation of its president Mao Xiaofeng, [Company Registration in USA]who is reportedly implicated in the corruption case of Ling Jihua, a former senior political adviser.

China's largest train makers CNR and CSR dropped by the daily limit of 10 percent, as Mexican government announced its plan to cut public finances and suspend a $3.75 billion high-speed train tender.

Utility shares led the loss on Monday, with Jilin Power, Shanghai Electrics, Datang International Power Generation Co and Dongfang Electrics slumping more than 7 percent. The manufacturing purchasing managers�� index, a key measure of factory activity in China, dropped to below the 50-point mark for the first time since October 2012, official data showed on Sunday.

The gauge posted at 49.8, while a reading below 50 represents contraction.

The CSI 300 index closed on Monday at 3,353.96, down 2.3 percent.

Realted Story: China's Jan manufacturing PMI falls to 28-month low, by Xinhua

BEIJING - Chinese manufacturing activity continued to wane in January as a key index dropped below the 50-point mark for the first time since October 2012, marking increasing downward pressures on the economy, official data showed on Sunday.

The manufacturing purchasing managers' index (PMI), a key measure of factory activity in China, posted at 49.8 in January, down 0.3 percentage point from December, according to the data jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).

A reading above 50 indicates expansion, [HK Corporate Registration]while a reading below 50 represents contraction.

The reading, falling for four consecutive months, surprised the market as many institutions had forecast the PMI would rebound slightly.