China shares tumble 3 pct on weak overseas markets

Published: 27 Sep 2009 23:12:55 PST

SHANGHAI, Sept 28 - China's key stock index tumbled 3 percent late on Monday as falling global markets and prospects of a continued heavy supply of new shares sparked a selling spree ahead of a long holiday.

Investors actively traded stocks with corporate restructuring plans. Computer maker Tiancheng, among the biggest losers of the day, plunged its 10-percent daily limit to 21.03 yuan after it disappointed investors by saying it had given up a restructuring plan announced one month ago.

The Shanghai Composite Index fell to an intraday low of 2,752.773 points just a few minutes ahead of the close. It ended down 2.6 percent. Last week, it dropped 4.2 percent, its biggest weekly fall in six weeks, with sentiment hurt by a huge supply of new shares, including initial public offerings (IPOs).

On Monday, Japan's benchmark Nikkei dropped 2.5 percent and the MSCI index of Asia-Pacific stocks outside Japan was 1.3 percent lower.

Shanghai had initially lagged Asian falls in the morning but when overseas markets showed no signs of recovery in the afternoon, Chinese investors became increasingly unwilling to keep stocks on hand ahead of an eight-day holiday starting on Oct. 1, China's National Day. ($1 = 6.83 yuan)