Chinese shares sank on Monday, with almost every stock closing lower, amid concerns over possible interest-rate hikes in China and the effects of the U.S. credit crisis.
The benchmark Shanghai Composite Index tumbled 2.6 percent, or 142.63 points, to 3,820.05. The Shenzhen Component Index closed at 13,207.78, a slump of 609.87 points, or 4.41 percent.
Losses outnumbered gains by 821 to 23 in Shanghai and by 656 to 10 in Shenzhen, and more than 300 stocks fell by the daily limit of 10 percent.
Investor confidence crumbled following losses in other markets, such as a 5.2 percent fall in Hong Kong. There were also fears over the implications of the rescue of investment bank Bear Stearns. Investors were also worried about the possibility of rate hikes in China, following remarks by central bank governor Zhou Xiaochuan.
Analysts said that market confidence was too fragile to be tested by any policy changes. They also said that it was likely a third round of the sub-prime crisis would soon hit markets. This would force Asian markets to tumble and China wouldn't escape unscathed.
Among the top 10 heavyweights, nine shares fell by 2 percent to more than 8 percent -- although PetroChina gained 1.25 percent to 22.61 yuan (about 3 U.S. dollars). The Hushen 300 Index, which tracks the performance of both the Shanghai and Shenzhen stock exchanges, closed at 3,965.28, down 4.63 percent.
Aggregate turnover was 109.5 billion yuan, up from 93 billion yuan on Friday.
(Xinhua News Agency March 17, 2008)
