Money

China stocks plunge most since August

(Agencies)
Updated: 2010-05-17 16:08

Investors look at the stock quotes at a securities trading firm in Shanghai. [Asianewsphoto]

China's stocks plunged, driving the benchmark index to the biggest loss since August, on concern government steps to cool the property market and European austerity measures will hurt economic growth.

China Vanke Co paced declines by developers after Premier Wen Jiabao said the government will "decisively" contain gains in home prices. Jiangxi Copper Co tumbled 6.3 percent after commodity prices plunged the most in nine weeks and the Ministry of Commerce said the euro's decline is pressuring exporters. Guangzhou Shipyard International Co, which got more than half of last year's sales from Europe, tumbled 8.4 percent.

Related readings:  'Measures to cool property already working'  Investor concern on Europe hits stocks  China may expand scope of real estate tax before May 20  Property stocks 'may fall'

"Investors are worried that more property tightening is on the way even as Europe throws up more uncertainties about the global economy," said Michelle Qi, a Shanghai-based portfolio manager at Bank of Communications Schroders Fund Management Co, which oversees about $6.5 billion.

The Shanghai Composite Index tumbled 136.69, or 5.1 percent, to 2,559.93 at the close, the biggest drop since Aug 31 and the lowest since May 4, 2009. The CSI 300 Index slid 153.31, or 5.4 percent, to 2,714.72.

The Shanghai Composite has lost 22 percent this year, the world's fourth-worst performer among the 93 gauges tracked by Bloomberg, on concern the government will keep tightening monetary policy to contain inflation and avert asset bubbles. The measure on May 11 entered a bear market after falling 21 percent from its Nov 23 high.