China shares open down 4.09%, extending biggest rout in 8 years

China's benchmark Shanghai stock index slumped 4.09 percent at the open on Tuesday.
China's benchmark Shanghai stock index slumped 4.09 percent at the open on Tuesday. PHOTO: AFP

SHANGHAI (REUTERS, BLOOMBERG) - Chinese stocks fell, with the benchmark gauge extending its biggest one-day rout since 2007, shrugging off Beijing's promises of more support for the market.

The Shanghai Composite Index dropped 3.1 per cent to 3,611.28 at 9:32 a.m. local time, led by technology and industrial companies. The gauge tumbled 8.5 per cent on Monday amid concern over the viability of government efforts to prop up share prices as the economy slows.

Stock regulators said late on Monday they were prepared to buy more shares to support the stock market, and would deal severely with anyone engaged in "malicious shorting".

Reuters reported that the state-run margin lender had repaid loans intended to support the stock market ahead of schedule, alarming investors who feared the government's commitment to supporting the ailing market may be flagging.

China CSI300 stock index futures for August pointed to further losses, falling 3.3 per cent to 3,635.6, or 63.10 points below the current value of the underlying index.

In Hong Kong, the Hang Seng index dropped 0.6 per cent, to 24,199.92 points. The Hong Kong China Enterprises Index lost 1.1 per cent, to 11,106.97.