SHANGHAI stocks tumbled this morning on speculations that the resumed trading of Treasury bond futures and new share offerings will hurt stock prices.

The key Shanghai Composite Index dropped 32.38 points, or 1.61 percent, to 1,974.82. Turnover was 38.6 billion yuan (US$6.3 billion) by the noon break.

The China Financial Futures Exchange received the green light from the China Securities Regulatory Commission to resume trading of Treasury bond futures after an 18-year suspension in an effort to promote liberalization of interest rates, the CSRC said after the market closed on Friday.

Pan Yibing, analyst at Founder Securities, said the market also declined on concerns that the CSRC will soon restart initial public offerings.

As of July 4, 746 companies were waiting for approval from the CSRC to launch IPOs on the Shanghai and Shenzhen bourses.

Cement producer, coal miners and steelmakers were among the biggest losers.

Shaanxi Qinling Cement (Group) Co dropped 4.4 percent to 4.15 yuan. Anhui Conch Cement Co, China's biggest cement producer, lost 3 percent to 13.14 yuan.

Wintime Energy Co fell 3.4 percent to 5.71 yuan. China Shenhua Energy Co, the nation's biggest coal producer shed 2.8 percent to 15.81 yuan.

Baoshan Iron and Steel Co, China's largest listed steel mill, fell 1.8 percent to 3.88 yuan. Inner Mongolia Baotou Steel Union Co declined 3 percent to 3.93 yuan.