China stocks close down 3.79%--August 8

Updated: 2011-08-08 15:57


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BEIJING-- Chinese shares plummeted on Monday as rating agency Standard & Poor's lowered the US's sovereign credit rating, triggering investor worries of a new global recession.

The benchmark Shanghai Composite Index slumped 3.79 percent to close at 2,526.82. The Shenzhen Component Index lost 3.33 percent to finish at 11,312.63.

Combined turnover rose to 214.8 billion yuan (about $33.4 billion) from 168.05 billion yuan on the previous trading day.

Losers outnumbered gainers by 863 to 58 in Shanghai and 1,239 to 70 in Shenzhen.

Standard & Poor's on Friday cut the US's debt rating to AA+ with a negative outlook for the first time in the country's history.

Unencouraging numbers in US economic data and sovereign debt crises in Italy and Spain stoked concerns that the global economy is heading for a double-dip recession, analysts said.

Official figures show that the US economy slowed to an annual growth rate of 1.3 percent during the second quarter of the year, falling short of market expectations of 1.7 percent.

The market sentiment was further dragged down by wide expectations that China's July inflation data, which is due to be released on Tuesday, may exceed 6 percent, triggering concerns of a new round of economic tightening measures.

The shipbuilding sector led the fall, with Guangzhou Shipyard International Co Ltd down 9.05 percent to close at 19.2 yuan per share, while CSSC Jiangnan Heavy Industry Co Ltd down 8.47 percent to 24.64 yuan.

Shares of the textile sector fell 6.52 percent across the board. Shanghai Sanmao Enterprise (Group) Co Ltd and Xinjiang Tianshan Wool Tex Stock Co Ltd both fell by the 10-percent daily limit to close at 10.15 yuan and 13.14 yuan, respectively.

Cement producers also fell, with Zhejiang Jianfeng Group Co Ltd down by the 10-percent daily limit to 12.25 yuan. Fujian Cement Inc lost 9.02 percent to finish at 12.21 yuan.

Bucking the trend, shares of gold producers rose more than 4 percent, with Shandong Gold Mining Co Ltd up 6.51 percent to close at 52.19 yuan while Zhongjin Gold Corp Ltd surged 5.13 percent to 24.64 yuan.

Other Asian markets also dropped. Hong Kong's Hang Seng bourse lost 2.17 percent to finish at 20,490.57 while Japan's Nikkei 225 stock average closed 2.18 percent lower to close at 9,097.56.

China's central bank has raised its benchmark interest rates three times and its reserve requirement ratio six times this year to rein in stubbornly high inflation.