hina's benchmark Shanghai Composite Index fell 4.9 percent Thursday, tracking losses elsewhere in Asia and in the U.S., in the market's biggest one-day decline in four months.
The benchmark Shanghai Composite Index lost 4.9 percent, or 271.76 points, to 5,330.02. It was the index's largest one-day decline since Jul. 5, when it fell 5.3 percent.
The Shenzhen Composite Index of China's smaller, second market fell 4.2 percent to 1,321.05.
Analysts said the markets fell in line with declines overnight in American American Depositary Receipts, or ADRs, of large Chinese traded in New York amid a broad sell-off on Wall Street.
``The sharp decline in ADRs in the U.S. has exerted selling pressure on their counterpart shares listed here,'' said Chen Huiqin, an analyst at Huatai Securities.
The drop shows how China's still largely insular market is becoming increasingly linked to overseas markets, despite limits on foreign investment in mainland shares and on overseas stock purchases by Chinese.
China Southern Airlines fell 9.8 percent to 19.26 yuan after its ADRs slumped 6.9 percent to US$56.95 overnight; China Petroleum & Chemical, or Sinopec, shed 7.1 percent to 22.49 yuan after its ADRs fell 2.3 percent, to US$141.55.
PetroChina lost 5.5 percent to 38.19 yuan after its ADRs fell 7.2 percent to US$212.80.
Investors also are apprehensive about a possible interest rate hike or other measures to cool the economy, and fret over the risk of a correction after months of gains. But the thin level of trading suggests investors want to hold onto shares rather than to sell.
``There's no panic selling in the market yet,'' said Zhang Gang, an analyst at Zhongyuan Securities.
Financial companies which have outperformed the general market in recent months succumbed to profit-taking. China Life Insurance fell 6.5 percent to 61.23 yuan; Bank of Communications Co. slipped 6.6 percent to 14.82 yuan and Citic Securities declined 7.3 percent to 96.31 yuan.
In currency dealings, the Chinese yuan rose to a fresh high against the U.S. dollar after the greenback sank to a record low against the euro overnight.
The dollar ended at 7.4207, down from Wednesday's close of 7.4421.
Thu November 8, 2007 05:19 EST
SHANGHAI, China (AP)
hina's benchmark Shanghai Composite Index fell 4.9 percent Thursday, tracking losses elsewhere in Asia and in the U.S., in the market's biggest one-day decline in four months.