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Chinese shares plummeted on Monday following the United States’ loss of its top-tier AAA credit rating from Standard & Poor’s.
The benchmark Shanghai Composite Index tumbled 3.68 per cent to 2,529.88 in intra-day trade, while the Shenzhen Component Index slid by 2.97 per cent to 11,354.42.
The benchmark Shanghai Composite Index opened 1.03 per cent lower on Monday morning and hit a year’s low of 2,497.92 during the morning trade on panic selling by investors, state run Xinhua reported.
The financial crisis seems far from coming to an end and the negative effect of the US fiscal stimulus polices are emerging, an analyst with Guotai Jun’an Securities said.
Ratings agency Standard & Poor’s on Friday downgraded the US debt rating from AAA to AA+ with a negative outlook for the first time. The un-encouraging development stoked concerns about the strength of the US economy.
Other Asian markets also dropped in reaction to the downgrade.
Hong Kong’s Hang Seng tumbled by 4 per cent to 20,109.49 and Japan’s Nikkei 225 stock average was down 1.3 per cent to 9,178.03 by its mid-day close.
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