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Chinese stock market falls to 2-year low

Chinese stock market falls to 2-year low

China's key stock index slumped to its lowest level in more than two years Monday, as investors reacted to dismal earnings reports and selloffs in overseas markets.
The benchmark Shanghai Composite Index lost 6.3 percent, or 116.27 points, to 1,723.35. It was the index's lowest close since it ended trading at 1,712.64 on Sept. 26, 2006.
The Shenzhen Composite Index lost 6.5 percent to 472.99.
Investors overwhelmed by negative news were rushing to escape, analysts said.
"The panic spread much faster than we expected. It's as if everyone wants to be the fastest runner, with the best escape," said Feng Yuming, an analyst for Oriental Securities in Shanghai.
Many shares hit the daily downside limit of 10 percent. They included such blue chips as Baoshan Iron & Steel, which closed at 4.69 yuan and Aluminum Corp. of China, or Chinalco, which dropped to 5.91 yuan.
A slew of disappointing earnings reports have reinforced worries over the economic outlook.
On Monday, Chinalco said rising costs and slowing demand caused its third-quarter net profit to fall 92 percent, to 182.9 million yuan ($26.8 million).
Pacific Insurance said it posted a net loss of 1.64 billion yuan ($240 million) in the third quarter, compared with a net profit of 1.9 billion yuan ($278 million) in the same period a year earlier. Its shares lost 8 percent to 11.35 yuan.
Property shares continued to fall back following gains last week after the government announced a raft of policies aimed at boosting the housing market. China Vanke fell 9.95 percent to 5.88 yuan while Poly Real Estate Group dropped 7.5 percent to 13.24 yuan.
Oil and gas producer PetroChina, the heaviest weighted share in the Shanghai index, slipped 6.4 percent to 9.95 yuan, while refiner Sinopec lost 10 percent to 7.12 yuan.
Regulators have sought repeatedly to staunch losses in the country's share markets, which already were in the midst of a major correction when the recent market turmoil hit.
Over the weekend, the Finance Ministry announced it was scrapping a tax on capital gains for individual stock accounts, effective Oct. 9. Earlier, it announced policies aimed at encouraging big state-run companies to buy back shares, among other measures.
But so far these have failed to turn the market around given the gloom prevailing in global markets.
The Shanghai benchmark is now down about 72 percent from the all-time peak of 6,124.04 that it hit on Oct. 16, 2007.
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Associated Press researcher Ji Chen contributed to this report.


Updated : 2020-12-02 05:48 GMT+08:00