Shanghai: Stocks down 5.22% in afternoon trade

[SHANGHAI] China's benchmark Shanghai stock index slumped 5.22 per cent in afternoon trade on Monday, dragged lower by worries over the economy.

The Shanghai Composite Index plunged 212.64 points to 3,858.27. The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 4.54 per cent, or 105.37 points, to 2,217.34.

Weak economic data has hampered government efforts to prop up the market following a rout, dealers said.

On Monday, the government said that profits of major industrial firms slipped 0.3 per cent year-on-year in June.

On Friday, the preliminary reading of Caixin's Purchasing Managers' Index (PMI) - an independent survey of manufacturing activity - came in at 48.2 for July, the weakest reading since 48.1 in April 2014.

"Investors are not confident that the bull market will return any time soon," Jimmy Zuo, a trader at Guosen Securities, told Bloomberg News.

"People want to pocket profits after the benchmark index rose past the 4,000 mark." Officials have unveiled a slew of measures, including a police crackdown on short-selling and a ban on big shareholders selling stock for six months, to avert a slump which began in mid-June.

AFP