Mainland stocks fall to pre-global crisis low

Mainland stocks in Hong Kong tumbled to their lowest level since the depths of the global financial crisis, as a slide in the city's dollar spurred concerns over capital outflows.

Oil producers and property developers led declines.

The Hang Seng China Enterprises Index plunged as much as 5.5 percent before paring losses to close 4.3 percent lower in Hong Kong.

PetroChina Co fell to an almost 11-year low as oil extended its decline and CNOOC Ltd, China's largest offshore oil company, said it will cut output for the first time in more than a decade.

The Hong Kong dollar traded near its weakest level since 2007 as concern about the slowing economy curbs demand for the city's assets. The Shanghai Composite Index lost 1 percent.

"The local dollar's slide is igniting concerns that capital outflows are accelerating as funds are selling equities en masse," said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. "Overall sentiment is very bad in Hong Kong."

The so-called H-share gauge slid to 8,015.44, the lowest since March 2009. The index has slumped 17 percent this year, joining the Shanghai Composite as the world's worst-performing global benchmark measure out of the 93 tracked by Bloomberg.

Similar to mainland counterparts, Hong Kong policymakers are fighting to prevent a vicious cycle of capital outflows and a weakening currency with the resulting financial-market volatility heightening concern that China's deepest economic slowdown since 1990 will worsen.

The price difference of Hong Kong-listed shares and their mainland-traded peers widened the most in three months on Wednesday, according to a gauge tracking the price gap of the two markets.

PetroChina and China Petroleum & Chemical Corp tumbled at least 6 percent in Hong Kong.