The Shanghai Composite Index dropped 1.3 per cent to below 2,000 for the first in four years. Trading closed at 3pm CST with the index at 1,991.17, its lowest level since January 23, 2009.
Inner Mongolia Baotou Steel Rare-Earth Hi-Tech sank 4.5 per cent, while Shandong Dong-E E-Jiao, a traditional medicine-maker, declined 3.1 per cent. JiuGuiJiu tumbled 10 per cent after the Beijing News said the liquor maker will halt production to replace equipment.
“Investors have no confidence in long-term growth prospects and the government isn’t doing much to reverse the situation,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management, which manages US$120 million. “Trading values may fall even further.”
The Shanghai Composite is heading for a third straight annual loss after declining 9.5 per cent this year. The gauge has plunged 42 per cent through yesterday since August 4, 2009, when the gauge reached its highest level since the global financial crisis. The MSCI All-Country World Index has rallied 21 per cent in the same time.