(Corrects index details in the second para)
SHANGHAI, April 10 (Reuters) - China stocks fell on Monday with strong gains in listed companies that would benefit from the country's new economic zone were offset by weakness in other sectors after the securities regulator vowed to punish stingy "iron roosters".
The blue-chip CSI300 index fell 0.3 percent to 3,505.14 points, while the Shanghai Composite Index lost 0.5 percent to 3,269.39 points.
Dozens of newly-listed stocks and counters expected to issue bonus shares instead of paying cash dividends were hard hit, plunging the maximum allowed 10 percent limit, after the nation's top securities regulator urged listed companies to reward investors with cash dividends.
On the other hand, investors, unfazed by regulator's effort to cool speculative fever, continued to chase stocks related to Xiongan New Area, a recently announced new economic zone.
More than 20 stocks related to new plan surged 10 percent for the fourth consecutive session in a row, with more participants rushing into the investment theme by selling elsewhere.
The stock regulator has moved to cool speculative fever around plans to build a massive economic zone near Beijing, warning several listed companies against misleading investors with exaggerated claims.
Share prices in listed major insurers were largely flat, after news that the head of China's insurance regulator was being investigated for "serious disciplinary violations" - a phrase that usually refers to corruption.
Sectors were mixed. Gains were led by real estate stocks , while consumer and healthcare stocks dragged behind.
Share prices in steelmaker Hesteel, developer China Fortune Land Development and infrastructure operator Beijing Capital shot up 10 percent for the fourth straight session, as those companies are widely seen benefiting from the future development of the Xiongan New Area. (Reporting by Luoyan Liu and John Ruwitch; Editing by Eric Meijer)