Chinese stocks face Monday mayhem, plunge 8 percent

Beijing/Mumbai, Aug 24:

Chinese stocks crashed on Monday, with the benchmark Shanghai Composite Index down 8.45 percent to close at 3,211.2 points. The Shenzhen Component Index also shed 7.27 percent to end at 10,983.42 points.

The crash was widespread and the Hong Kong stocks also dived for the 7th consecutive trading session on Monday. The benchmark Hang Seng Index dropped 1,158.05 points, or 5.17 percent, to close at 21,251.57 points. It traded between 21,136.48 and 21,679.45.

But the turnover in the Hong Kong bourse totaled 138.97 billion HK dollars ($17.93 bn), up from 118.28 billion HK dollars the previous trading day, Xinhua news agency reported.

All four sub-indices lost ground, with the commerce and industry sub-index falling the most by 5.48 percent, followed by the properties down 5.24 percent, the finance 5.12 percent and the utilities 2.93 percent.

The ChiNext Index, which tracks China’s NASDAQ-style board of growth enterprises, fell 8.05 percent to close at 2,153.52 points. Shares in all sectors tumbled more than eight percent. The banking and mining industries lost the least, but still dropped more than 8.3 percent.

The slump came despite the Chinese government’s decision on Sunday to allow pension funds to invest in the stock market. These pension funds, with assets pg around $325 billion, were allowed to place up to 30% of their net assets in stocks, equity funds and balanced funds.

The massive fall in Chinese stock market comes from the disappointment that Beijing did not announce expected policy support over the weekend after the country’s main market indexes shed 11 percent last week, brokerage Sharekhan said.

In other overseas markets, the stocks in Europe also opened lower in early trade today, also over worries that the top economy in Asia was slowing faster than previous anticipated. Key indices in Britain, France and Germany were all down between 2-2.75 percent. (IANS)