SHANGHAI stocks tumbled more than 2 percent and closed at a one-year low yesterday amid fragile market sentiment.
The Shanghai Composite Index lost 2.09 percent, or 68 points, to 3,222.74 after reaching an intraday high of 3,352.95, the lowest since March 30, 2007.
Turnover in the local market further rose to 62.51 billion yuan (US$8.93 million) from 54.90 billion yuan on Wednesday. Losers outnumbered gainers 754 to 79.
"Investor confidence has been shattered and blue chips are still too weak to lead significant rebounds at the moment," said Mao Long, a Huatai Securities Co analyst. "However, some technical rebound might follow in the short term after consecutive declines."
Banks declined after the central bank said it will ask them to freeze more money from lending as part of moves to control liquidity and fight inflation.
China Minsheng Banking Corp, the nation's only privately controlled bank, dropped 6.4 percent to 7.28 yuan. China Merchants Bank, the country's largest duel-currency credit card issuer, fell 1.38 percent to 29.37 yuan. Bank of China dropped 2.49 percent to 4.70 yuan while Shenzhen Development Bank Co retreated 6.8 percent to 23.17 yuan.
The People's Bank of China, the central bank, announced late Wednesday on its Website that the reserve ratio - the amount of money a bank must put at the central bank - will rise 0.5 percentage point to 16 percent on yuan deposits on April 25.
Shares of power producers and real estate developers continued to correct.
Huaneng Power, the listed unit of the country's largest power group, and Dongfang Electrica Corp both tumbled to the daily limit of 10 percent to end at 7.23 yuan and 34.25 yuan. Shanghai Electric Power Co lost 8.7 percent to 6.10 yuan. China Yangtze Power Co, owner of the world's largest hydropower project, slumped 4.4 percent to 11.65 yuan.
China Vanke Co, the country's biggest listed property firm, shed 0.52 percent to 21 yuan, falling for the fifth consecutive day, and Poly Real Estate Group Co declined 4.22 percent to close at 21.11 yuan.