Shanghai Stock Exchange falls 8.48 pct., worst drop in 8 years

The Chinese Stock Exchange suffered one of the sharpest drops in its history on Monday and its biggest since 2007, less than two weeks after it had begun to recover from its worst month ever, during which stocks lost onethird of their value.

The Shanghai market fell 8.48 percent, while the Shanzen stock exchange fell by 7.59 percent.

More than 1,600 companies, which account for more than half the entities in both markets, registered losses of around 10 percent, the maximum daily variation permitted by Chinese regulations.

The National Bureau of Statistics announced early Monday major Chinese industrial firms registered an interannual 0.3 percent fall in June, in sharp contrast to a 0.6 percent interannual growth in May, which seems to have provoked the stock market crash.

During the first hour of the business day, Shanghai fell by 2.1 percent and Shanzen by 2.04 percent, which crossed three percent by midsession and registered its sharpest decline towards the end of the day.

After the stock market losses registered last month, Chinese authorities announced measures to stabilize the market and an investigation into illicit activities, to gain back the confidence of over 90 million individual investors.

Since Jul 9, the stock exchange had seemed to be on a path of recovery, and the Shanghai market crossed the 4,000 point psychological barrier, but Beijing had said it would not consider its markets to have stabilized until it crossed at least 4,500 points.