(Agencies)
Updated: 2008-02-25 17:47

 

Investors watch stock quotes at a broker's trading hall in Changchun, Northeast China's Jilin province, on February 25, when Chinese A shares tumbled over 4percent on panic selling due to liquidity worries.[Asianewsphoto]

Chinese A shares closed sharply lower on panic selling due to liquidity worries, with China Unicom, PetroChina and other large caps leading the declines, dealers said.

China United Telecommunications Corp Ltd (Unicom) slumped 10percent to 10.92 yuan amid rumors that the company could raise about 60 billion yuan ($8.39 billion) through the issue of additional A-shares. Unicom denied any such fundraising plans.

Related readings: Index closes 3.47percent lower on liquidity concern China walks fine line to keep growth with low inflation PBOC plans monetary policy innovation M2 supply jumps 18.94percent in Jan PBOC to stick to 'tight' stance

The benchmark Shanghai Composite Index closed down 177.75 points or 4.07percent at 4,192.53, closing below 4,200 for the first time since July 23.

Turnover fell to 93.05 billion yuan from 109.82 in the previous session.

"The market seemed vulnerable after recent falls. Investors overreacted to large fund-raising plans, even those which could only be market rumors," said Zhang Qi, an analyst at Haitong Securities.

The market failed to rebound from a more than 3 percent decline on Friday, after the China Securities Regulatory Commission (CSRC) gave its go-ahead to two more equity funds to be launched by SooChow Asset Management Co and China Nature Asset Management Co.

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