Mainland stocks yesterday joined a global sell-off amid intensifying worries of an impending US recession with the key Shanghai index suffering the biggest one-day fall in six months.
Investor pessimism over a US stimulus plan to prevent a recession sent stocks plummeting worldwide.
In Hong Kong, the Hang Seng index tumbled 5.49 percent, the largest percentage drop since the September 11 terror attacks.
Japan's Nikkei Index fell 3.86 percent. Germany's DAX was down 6 percent.
Analysts said that the fears of a US recession are fueling the bearish sentiment in China.
The market yesterday was also responding in part to Ping An Insurance of China's announcement that it would issue A shares and convertible bonds to raise 160 billion yuan ($22 billion), the largest re-financing ever.
"The weak stock market performance of neighboring countries and regions intensified the bearish sentiment of domestic investors," China International Fund Management Co Ltd said in a report yesterday.
Chen Jiwu, deputy general manager of Fullgoal Fund Management Co Ltd, said the negative impact of US economic woes on the global capital markets would continue.
"The fragile balance of the stock market, comprising overvalued mainland stocks, can easily be upset by changes in the domestic or overseas investment environment," said Nicole Yuen yesterday, head of UBS China Equities– she predicted further that, "The A-share market will see a lot of price fluctuations in 2008.”
Some analysts said that investors are worried about further government tightening measures.
（英语点津 Celene 编辑）
About the broadcaster:
Brendan is an Australian who has been involved in education and writing for over a decade. He has published most recently for the Tiger Airways Inflight magazine, The Bangkok Post, The Taipei Times and Japan's Hiroshima Outside Magazine. He holds a Masters Degree in Community Development and Management and has resided in China for over 3 years.
