China Stocks Slip to Lowest Levels in 3-1/2 Years

Persistent anxiety over a possible economic slowdown has driven down share prices on China’s stock markets to their lowest level since early 2009.

On Tuesday the benchmark Shanghai Composite Index fell 1.26% to close at 2,141.40 while the Shenzhen Component Index closed at down 1.58% to 9,186.02.

Combined turnover fell to 98.13 billion yuan ($15.58 billion) from Friday’s 109.64 billion yuan ($16.9 bil.).

The slide reflected fears over second-quarter GDP data released in mid-July showing the slowest quarterly economic growth rate in over three years.

Bank stocks on the A share market posted the biggest losses. China Merchants Bank fell 3% to 9.69 yuan, its lowest close in six years, on news that it had postponed a re-financing plan due to unimproved capital adequacy ratio.

Hua Xia Bank also plunged 3% to 8.42 yuan while Shanghai Pudong Development Bank dropped 2.1% to 7.45 yuan.

Insurers also suffered drops on fears they will be hard hit by compensation claims by victims of Beijing’s weekend’s storms which were the heaviest in six decades, killing at least 37 people and causing economic losses of nearly 10 billion yuan.

China Life, the nation’s biggest life insurer, slid 1.81% to 19.52 yuan. Ping’an Insurance, the number two insurer, fell 2.57% to 44.79 yuan.

Securities brokerages also suffered drops on news that government regulators asked them to lower transaction fees by 20%.

Citic Securities, China’s largest securities brokerage by asset value, plunged 4.06% to 12.30 yuan. Haitong Securities slipped 1.21% to close at 9.80 yuan.