Chinese share prices closed about 7% lower as investors dumped stocks after last week’s sell-off on Wall Street amid lingering fear of a US recession.

On Friday, the Dow Jones Industrial Average fell 1.38% to 12,207.17, ending a two-day rally boosted by the US Federal Reserve’s emergency federal funds rate cut of 0.75 percentage points.

China’s main stock index plunged 7.19%, its fourth biggest drop this decade, because of sliding global markets and heavy snow across central and eastern China, which is disrupting food and energy supplies.

The benchmark Shanghai Composite Index, which covers both A and B shares, plunged 342.39 points. The fall neared last Tuesday’s 7.22%drop, the highest percentage points loss in 7.5 months.

A Bohai Investment analyst said the once isolated domestic market was now more influenced by other world markets.

He added there was little buying interests as investors expected the US subprime mortgage crisis wouldn’t be tackled in a short time.
Source: China Daily