Slump sends bearish signal

SHANGHAI - The Shanghai Composite Index's fall below "key" technical support of 2481 deepened losses on Tuesday and sent a bearish signal to investors, according to BGC Partners Inc.

The measure tumbled 4.27 percent to 2427.05, the steepest decline since May 17. The gauge breached a so-called "double-bottom" at 2481, Jamie Coutts, a Singapore-based technical analyst at BGC, said in e-mailed comments. A double bottom is a chart pattern showing a drop in price, followed by a rebound and then another drop to the same price, usually indicating support at that level.

"Tuesday's break below a key technical level is prompting a rush of selling," said Michael Liang, chief investment officer at Foundation Asset Management (HK) Ltd, which oversees $120 million. Shanghai Good Hope Equity Investment Management Co President Zheng Tuo said investors "now expect shares to extend declines after the breach".