SHANGHAI - Stocks declined on the Chinese mainland, dragging the benchmark index down 20 percent from a November high, as the loss of America's top credit rating fueled concern global economic growth will slow.

Jiangxi Copper Co and PetroChina Co dropped more than 3 percent after metals and crude prices slumped. China Cosco Holdings Co fell to a record low, pacing losses by shipping lines, on concern trade will falter.

"The downgrade hammered investors' confidence in the economic recovery and it will be hard to turn that pessimistic sentiment around," said Mei Luwu, a fund manager at Lion Fund Management Co, which oversees more than $7.8 billion.

The Shanghai Composite Index slumped 3.79 percent on Monday, the biggest drop since Nov 16 and the lowest level since July 19, 2010. A decline of 20 percent or more signals a so-called bear market to some investors. The CSI 300 Index fell 3.57 percent on Monday.

Standard & Poor's lowered the US long-term rating one level to AA+ after the markets closed on Aug 5 while keeping the outlook at "negative." The rating may be reduced to AA within two years, if spending reductions are lower than agreed to, interest rates rise or "new fiscal pressures" result in higher general government debt, the New York-based S&P said.

Xinhua News Agency said in a commentary that the United States must cure its "addiction" to borrowing. China has accumulated $1.16 trillion of the debt and is the largest individual foreign holder.

Gauges tracking materials and energy stocks on the CSI 300 sank at least 3.7 percent. Jiangxi Copper lost 4.48 percent, the lowest close since June 20. PetroChina retreated 3.14 percent, the lowest since its listing in Nov 5, 2007.

China Cosco, the nation's biggest listed shipping company, slipped 6.50 percent, the lowest since the stock began trading in June 2007. China Shipping Development Co sank 6.97 percent, the lowest since Oct 29, 2008.

Policymakers held emergency conference calls over the weekend as they sought to stave off a collapse in investor confidence that has already wiped out about $5.4 trillion in global equity values since July 26. The European Central Bank signaled its readiness to start buying Italian and Spanish bonds to stem the region's debt contagion.

China International Capital Corp closed its technical long call on China's stocks in place since June 20, amid concern Europe's debt crisis is worsening.

"Any short-covering rally later should be considered an opportunity for exit," Hao Hong, a Beijing-based global equity strategist at CICC, the nation's biggest investment bank and top-ranked provider of China research in Asiamoney's survey, said in a report on Monday.

The Shanghai stocks measure trades at 11.6 times estimated earnings, the lowest on record according to daily data compiled by Bloomberg.

Bloomberg News