China''s stocks joined a global plunge in equity markets Friday by tumbling more than two percent to a seven-week low, after a sharp overnight drop in the U.S. stock market triggered investor worries of new round of global economic crises.
The benchmark Shanghai Composite Index slumped 2.15 percent to close at 2,626.42. The Shenzhen Component Index edged down 1.95 percent to finish at 11,701.76.
Combined turnover rose to 168.05 billion yuan (26.05 billion U.S. dollars) from 138.16 billion yuan on the previous day.
Losers outnumbered gainers by 812 to 103 in Shanghai and 1126 to 164 in Shenzhen.
The shares tracked a 512.76-point drop in the Dow Jones industrial average index on Thursday, with the index opening 2.38 percent lower on Friday morning.
Growing concerns about the U.S.''s economic recovery and the European debt crisis have renewed investors'' fears of a new global recession, leading to Friday''s bout of panic selling, said analysts.
The U.S. recently reported weaker-than-expected economic indicators for manufacturing, consumer spending and employment, which suggest a faltering economic recovery.
Market expectations of a new round of interest rate hikes also impacted Friday''s market, as the consumer price index (CPI) for July is widely expected to stay at the same level reached in June, a three-year high of 6.4 percent year-on-year, according to Investoday Securities.
Lu Zhengwei, chief economist with China''s Industrial Bank, said the country''s persistently high inflation rate will likely to trigger another interest rate hike in August.
Banks retreated sharply on Friday, with the Bank of Communications down 2.97 percent to 4.58 yuan per share. China Construction Bank, the country''s second largest lender, plummeted 1.95 percent to 4.53 yuan.
Resource shares also dragged down the market, with PetroChina, the nation''s largest oil producer, down 2.58 percent to 10.18 yuan.
Non-ferrous stocks declined 2.31 percent. Kingray New Materials Science & Technology Co., Ltd. slumped 5.24 percent to 17.55 yuan, while Jilin Liyuan Aluminum Co., Ltd. declined 5.45 percent to 27.23 yuan.
Source: Xinhua