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1st LD-Writethru: China stocks plunge on Thursday

Xinhua, August 20, 2015 Adjust font size:

China stocks extended losses on Thursday following volatile trading the previous day.

The benchmark Shanghai Composite Index declined 3.42 percent to close at 3,664.29 points. The Shenzhen Component Index lost 2.90 percent to close at 12,584.58.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, shed 2.41 percent to end at 2,508.82.

Losers outnumbered winners by 809 to 118 in Shanghai, and by 1,167 to 198 in Shenzhen.

Stocks in aerospace and aviation, defence and ship manufacturing led the slump. Avic Aircraft Co., ltd. slumped by the daily limit of 10 percent to end at 34.13 yuan (5.34 U.S. dollars) per share. Jiangxi Hongdu Aviation Industry Co., Ltd. also dropped 8.09 percent to end at 27.93 yuan.x The major index fluctuated more than 6 percent on Wednesday, underlining persistent worries about economic pressures despite continued government rescue measures. On Tuesday, the Shanghai Index dived 6.1 percent to end at 3,749.12 points, the biggest daily decline in three weeks, breaking a three-day winning streak.

Gao Xiang, an analyst with CITIC Securities, said the market has shown signs of recovery after the recent rout but investor confidence has been shaken by concerns that authorities could pull bailout funds.

In the past few days, the Shanghai Index reached more than 4,000 points before falling back to just above 3,700 on Tuesday afternoon.

The China Securities Regulatory Commission, the country's securities watchdog, said on Friday that the government "will allow market forces to play a bigger role in determining stock prices."

On Tuesday, the People's Bank of China injected 120 billion yuan (18.76 billion U.S. dollars) through seven-day reverse repurchase agreements in its latest move to provide liquidity. Endi