Chinese share prices continued to slide on Tuesday following the overnight slump of Wall Street, as investors fretted over further economic cooling measures.
The benchmark Shanghai Composite Index, which covers both A and B shares, closed down 40.59 points, or 0.83 percent, at 4,836.17.
The key index has now tumbled 26.6 percent from its record high of 6,124.04 on Oct. 16. Despite the correction, the index still has risen 80.8 percent since the beginning of this year.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange fell 44.86 points, or 0.28 percent, to 16,074.11.
The Hushen 300 Index, which accounts for 60 percent of the nation's stock market value, dropped 27.38 points, or 0.56 percent, to 4,829.91.
The combined turnover of the Shanghai and Shenzhen bourses shrunk by a large margin to 96.47 billion yuan from 151.56 billion yuan in the previous session.
Overnight, the Dow Jones Industrial Average slumped 172.65 points, or 1.29 percent, to 13,167.20 amid worries over slowing economic growth and rising inflation.
Analysts said investors confidence had been seriously hit by the two-month-long correction and anticipation of more tightening measures.
The government said at the conclusion of the 2007 Central Economic Work Conference on Dec. 5 that it will adopt a "tight" monetary policy in 2008, a shift from a prudent approach it has followed for the last ten years. Since then, the government has imposed stronger curbs on lending and mortgage loans.
PetroChina, which accounts for nearly a quarter of the total weight of the benchmark index, plunged 2.50 percent to 29.24 yuan. Sinopec, the nation's largest oil refiner, dropped 2.96 percent to20.99 yuan.
Most consumer stocks, which saw strong gains in the previous two sessions, fell with profit taking. Suning Appliance Co., China's second largest appliance retail chain, slumped 5.03 percent to 64.91 yuan.
Recovery in banking, steel, property, and coal stocks helped cushion the slump, said Guangfa Huafu Securities, adding investors were still cautious as the market was expected to be volatile in the short term.
Banking, property and steel stocks regained some ground after the heavy losses of the previous sessions.
Industrial Bank rose 1.37 percent to 49.50 yuan. Heavyweight Industrial and Commercial Bank of China edged up 0.26 percent to 7.69 yuan.
Baoshan Iron and Steel, China's largest steel marker, was up 1.84 percent to 16.03 yuan. China Vanke, the nation's largest listed property developer, rose 0.55 percent to 27.25 yuan.
Shares of coal producers also rose after Tuesday's Shanghai Securities News reported that coal power prices are set to jump about ten percent next year. Yanzhou Coal Mining climbed 4.09 percent to 20.10 yuan.
Source: Xinhua
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