Chinese equities Monday plunged 6.74 percent to a three-month low as investors showed concern a slowdown in bank lending would erode economic growth. The nose-dive was also driven by lower coal miners and oil refinery shares.

The benchmark Shanghai Composite Index fell 6.74 percent, or 192.94 points to finish at 2,667.75. This was the largest daily drop for the key Shanghai index since June last year.

The Shenzhen Component Index tumbled 7.55 percent, or 864.99 points, to end at 10,585.09.

Combined turnover shrank to 196 billion yuan (28.7 billion U.S. dollars) from 207.38 billion yuan last Friday.

New yuan-denominated loans this month amounted to 200 billion yuan on Friday, which indicated lending for the entire month would be less than 300 billion yuan, or even less than last August's record low of 270 billion yuan.

To stimulate economic growth, China's banks extended a total of 7.73 trillion yuan new loans in the first seven months this year, far exceeding the annual target of 5 trillion yuan.

All sectors on the two bourses fell. Losers outnumbered gainers by 842 to 27 in Shanghai and 726 to 23 in Shenzhen. Nearly 300 stocks fell by the daily 10-percent limit.

Banking shares declined across the board. The Industrial and Commercial Bank of China, the country's biggest lender, lost 2.38 percent to 4.52 yuan, and China Construction Bank, the country's largest mortgage lender, was down 3.68 percent to 5.24 yuan.

Coal miner shares fell the most, with 11 of the 27 stocks in the sector plunged by the daily limit of 10 percent. China Shenhua, the nation's largest coal producer, plummeted 9.77 percent to 27.88 yuan per share.

Sinopec, Asia's top oil refiner, declined by the daily 10-percent limit to 11.13 yuan on concern about profitability as oil prices will be kept unchanged to support the economy, despite rising global crude oil prices.

PetroChina, the country's largest oil producer, dropped 6.7 percent to 12.8 yuan.

(Xinhua News Agency August 31, 2009)