Chinese shares slump 2.40% in morning session

Chinese shares plummeted 2.40 percent on Friday morning, dragged down by an overnight Wall Street fall and a dampened investor confidence.

The Shanghai Composite Index dived 2.40 percent, or 54.73 points, to close at 2,222.68. The Shenzhen index fell 1.54 percent, or 115.42 points, to close at 7,358.18 points.

Wall Street slid on Thursday with Dow Jones down more than 340 points as disappointing jobless and retail data left investors in doubt of a recovery in the U.S. economy, and dealers said the downturn partly contributed to China equity's fall.

Aggregate turnover was 20.8 billion yuan from 38.99 billion yuan on the previous day.

Losses outnumbered gains by 756-64 in Shanghai and 646-33 in Shenzhen.

On Thursday, the Shanghai and Shenzhen stock exchanges released new transaction regulations respectively, saying the country will further enhance market transparency and perfect transaction mechanism. These rules will take effect as of Oct. 1.

According to the regulation, companies no longer have to suspend transactions of their shares when they publish important information, or release annual reports. Before that, companies halt shares trading for an hour during these periods.

Temporary trading suspension was allowed when a company's shareprice fluctuate abnormally, said the Shanghai Stock Exchange.

Meanwhile, a trading moratorium for investors who had bought stakes in companies before their initial public offers will be slashed to 12 months from current three years.

"The regulation, which intend to better link up with international rules, will help to build a more effective and fair domestic stock market in the long run. However, it seems not as favorable as investors expected," said Tang Xiaosheng, Guosen Securities senior analyst.

Investors expected that the government would adopt more effective measures to save the market, which has slumped about 58 percent this year, he said.

"The news that China Merchants Securities planned to launch an IPO also dampened investors confidence," Tang said.

China Merchants Securities Co. Ltd. said on late Thursday it would issue 358.55 million A-shares in domestic market, accounting for 10 percent of the company's total outstanding shares.

As for individual shares, China Shenhua, the country's biggest coal company, dipped 2.84 percent to 24.62 yuan. China Life, the leading life insurer, slide 2.83 percent to 23.68 yuan, while the Bank of Communications dived 2.57 percent to close at 6.83 yuan.

Source:Xinhua