Shanghai stocks collapsed to its lowest since August 2 today as investors feared China's economy may not hold up as well as expected if the United States economy skids into recession.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, dived 7.2 percent, or 342.4 points, to 4,419.29 at 3pm.
Losers in the Shanghai market outnumbered gainers 770 to 49 while two were unchanged.
The Shenzhen Composite Index, which covers the smaller mainland stock market, plunged 6.85 percent, or 98.25 points, to 1,335.96.
Huaneng Power International Inc led electricity producers lower on concern transport chaos amid the country's worst winter snowstorms in a decade would halt coal deliveries and disrupt fuel and power production.
Huaneng Power, the listed unit of China's largest power group, lost 8.79 percent, or 1.12 yuan (16 US cents), to 11.62 yuan. GD Power Development Co, the Shanghai-listed unit of one of China's five largest electricity producers, lost 7.62 percent, or 1.18 yuan, to 14.30 yuan.
Power shortages are "very serious'' after the worst snowstorms "in decades'' delayed coal shipments and disrupted power production, the National Development and Reform Commission, the nation's top economic planner, said in a statement today. The shortage has affected 17 provinces, said the commission's spokesman Zhu Hongren today.
China, which generates 78 percent of its electricity from coal, closed five percent of its coal-fired plants after snow delayed deliveries of the fuel. The shortage is China's worst ever, the State Electricity Regulatory Commission said last week.
Major airlines posted a wide sell-off today as blizzards forced the delay and cancellations of flights.
Air China, the world's biggest airline by market value, dropped 9.98 percent, or 2.41 yuan, to 21.73 yuan. China Southern Airlines Co, the nation's biggest carrier by fleet size, lost 9.99 percent, or 2.33 yuan, to 20.99 yuan. China Eastern slumped 9.97 percent, or 1.73 yuan, to 15.62 yuan while Shanghai International Airport Co, operator of China's second-busiest airfield, fell 7.41 percent, or 2.75 yuan, to 34.36 yuan.
Snow delayed up to 35 percent of flights from two airports in Shanghai, the airfields' operator said.
The key Shanghai index lost 8.1 percent last week with the barometer dropping more than five percent on January 21 and more than seven percent the next day.
US growth probably slowed to a 1.2 percent annual rate from October to December, a quarter of the previous three months' pace, according to the median estimate in a Bloomberg News survey. The GDP report is due on Wednesday. The US market accounts for about a fifth of China's exports.
US stocks slid on Friday, sending the Standard & Poor's 500 Index lower for the first time in three days. European shares dropped, dragging the Dow Jones Stoxx 600 Index to its seventh straight weekly decline.
Today's collapse on the mainland came amid a "black Monday" in other Asian markets.
India's benchmark stock index dropped four percent in the first 10 minutes of trading and Hong Kong's market sank 4.7 percent by midday.
Japan's benchmark Nikkei 225 index was down 3.1 percent, erasing much of its 4.1 percent jump on Friday.
(Shanghai Daily January 28, 2008)
