Shares carrying the "special treatment" tag sank on Monday as the central authorities clarified rules for delisting aimed at improving market compliance.

Impacted by the latest stringent rules targeting delisting, ST shares, such as Harbin Gong Da High-Tech Enterprise Development, fell by the 5 percent daily limit soon after the market opened on Monday.

The plunge was in sharp contrast to the situation a week ago, when 53 of the 78 shares with ST tags surged by the daily limit last Monday.

Shares tagged with the high-risk warning attracted speculative hot money recently despite their poor fundamentals.

The major downturn of the ST sector came after Chinese securities regulators unveiled fresh terms as part of the new delisting rules that would force companies to delist once they had been found to have committed serious mistakes or crimes related to public safety.

New scenarios prompting forced delisting have been added to the latest rules - listed companies found to be falsifying or failing to disclose important information or harming public health and public safety will be forced to delist, according to separate announcements made by the Shanghai and Shenzhen stock exchanges late on Friday night.

The new regulations came after illegal activities by vaccine maker Changsheng Biotechnology had triggered widespread public anger and concern.

Under the new rules, the Shenzhen Stock Exchange has imposed mandatory delisting on Changsheng Biotechnology, which was found to have falsified data and sold ineffective vaccines for children, according to the announcement by the bourse on Friday.

Earlier in October, the China Securities Regulatory Commission announced a 600,000 yuan ($86,500) fine for Changsheng, and the China Food and Drug Administration said it had imposed penalties on the company, including a fine of 9.1 billion yuan and the banning of 14 of its executives from working in the industry again.

Zhang Anyuan, chief economist with Dongxing Securities, said the stock prices of listed companies with small market capitalization had continued to rise recently.

The performance of some stocks has deviated significantly from their fundamentals. Clarification of the delisting rules would help investors avoid losses and help enterprises improve their corporate governance, he said.

Looking ahead, emerging industry stocks are worth investing in, while investors are suggested to avoid purchasing stocks which have seen abnormal surges in recent weeks, Founder Securities said.