China shares dived Monday as the benchmark Shanghai Composite Index was down 8.49 per cent at closing amid fears of economic slowdown.
It was the sharpest daily decline since February 27, 2007, and followed last week’s losses of 11 per cent for the week.
The smaller Shenzhen Component Index closed down 7.83 per cent and the ChiNext Index, tracking the country’s NASDAQ-style board of growth enterprises, closed down 8.08 per cent.
The government Sunday moved to allow pension funds to invest in the stock market, hoping to bolster share prices, the official Xinhua news agency reported.
“The pension policy released yesterday may have led people to believe that the government will suppress the market,” Shanghai-based independent financial analyst Ye Tan told dpa.
The central bank “has not shown signs of adopting more loosening measures, which may have also increased panic in the market,” she said.
Share prices across Asia were also hammered Monday, with Hong Kong’s Hang Seng Index closing down more than 4 per cent and Japan’s Nikkei down more than 4 per cent at closing.
Analysts say China is struggling to meet its growth target for 2015 of about 7 per cent – itself a slowdown from recent years – amid sluggish investment growth and falling exports.
The country’s GDP grew 7.4 per cent in 2014, the weakest annual expansion in 24 years.