China stocks tumble on profit-taking

 
Chinese shares fell sharply Tuesday on profit-taking and worries about a slowing economy after advancing for four trading days.

The benchmark Shanghai Composite Index sank 6.31 percent, or 128.5 points, to close at 1902.43. The Shenzhen Composite Index for China's smaller second market dropped 6.85 percent to 524.98.

China's central bank said in a report Tuesday the risks of an economic downturn in China are growing.

Stocks rallied last week after Beijing announced a $586 billion stimulus package to spur the economy.

Resource stocks plunged with major producers Jiangxi Copper Ltd., Baoshan Iron & Steel Ltd. and Aluminum Corp of China, all fell by the daily limit of 10 percent. Jiangxi Copper ended at 10.72 yuan, Baosteel at 5.01 yuan and Aluminum Corp. at 7.26 yuan.

China Shenhua Energy Ltd., the country's biggest coal producer, lost 9.16 percent to 18.35 yuan.

Blue chip PetroChina Ltd., the country's biggest oil producer, fell 4.57 percent to 11.08 yuan and China Petroleum & Chemical Corp., or Sinopec, Asia's biggest oil refiner by volume, shrank 7.53 percent to 7.61 yuan.

Midsize lender Pudong Development Bank Ltd. fell by the daily maximum of 10 percent to 10.72 yuan. Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, lost 3.38 percent to 4 yuan. Bank of China Ltd. retreated 2.88 percent to 3.37 yuan, while China Construction Bank Ltd. shed 5.71 percent to 4.29 yuan.

Insurers saw a big slide despite the regulators lifted restrictions of investment on capital markets. Ping An Insurance Ltd. gave up 10 percent to 24.47 yuan, and China Life Ltd. fell 8.01 percent to 19.86 yuan.

Real estate giant China Vanke Ltd. fell by the full 10 percent daily limit to 6.15 yuan, while rival Poly Real Estate Group declined 6.8 percent to 14.81 yuan.

China Eastern Airlines Corp. and China Southern Airlines Ltd. were among the very few bucking the downwards after reports on government would inject multi-billion capital to help the airlines.

On currency markets, the yuan was trading at 6.8286 to the U.S. dollar at 0800 GMT, down from Monday's close of 6.8264.

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