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China stocks slump over 2 pct to 43-month low


08:26, September 21, 2012

BEIJING, Sept. 20 (Xinhua) -- Chinese stocks slumped more than 2 percent on Thursday hitting the lowest level in 43 months, following investors' growing concerns over the economic prospects.

The benchmark Shanghai Composite Index tumbled 2.08 percent, or 42.99 points, to close at 2,024.84. The Shenzhen Component Index closed at 8,202.2, down 2.72 percent, or 229.54 points.

Combined turnover rose to 110.3 billion yuan (17.51 billion U.S. dollars) from 88.98 billion yuan on the previous day's trading.

Analysts said the sharp decline was mainly triggered by investors worrying over future economic growth, as the latest HSBC showed that the country's manufacturing activities contracted in September.

An HSBC report said on Thursday that the previewed purchasing managers index (PMI) for China's manufacturing sector rose moderately in September to 47.8, but it remained below 50, which suggests contraction.

Elsewhere, foreign direct investment (FDI) into China fell for the third consecutive month in August, which dropped 1.43 percent from a year earlier to 8.33 billion U.S. dollars, the Ministry of Commerce announced Wednesday.

Meanwhile, ongoing tensions between China and Japan over the Japanese government's so-called "purchase" of the Diaoyu Islands has further dampened market sentiment, said analysts.

Ship-builders were the only sector to benefit from the dispute, which gained more than 3 percent Thursday. China CSSC Holdings Limited was up 6.4 percent to 21.1 yuan, while CSSC Jiangnan Heavy Industry Co., Ltd. rose 2.14 percent to 16.23 yuan.

Coal miners and non-ferrous metal shares led Thursday's slump. Jinzhou New China Dragon Molybdenum Co., Ltd. tumbled 7.88 percent to 13.91 yuan, and Sino-Platinum Metals Co., Ltd. was down 6.64 percent to 19.7 yuan.

Shanxi Coking Co., Ltd. declined 6.81 percent to 8.07 yuan, while Heilongjiang Heihua Co., Ltd. dipped 6.83 percent to 5.32 yuan.

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