Chinese shares tumbled Thursday to an eight-month low on worries about possible government measures to cool a real estate boom and falling commodity prices.
The benchmark Shanghai Composite Index lost 4.1 percent, or 117.45 points, to close at 2,739.7, its lowest close since Sept. 3. The Shenzhen Composite Index for China's smaller second exchange dropped 3.7 percent to 1,088.31.
Investors worry that possible new government measures to cool surging housing costs will shrink credit after regulators hiked minimum bank reserve levels last weekend in a new move to tamp down inflation pressure.
"There is only bad news in the market these days -- from possible housing bubbles to Europe debt woes. Investors are pessimistic," said Zhang Fan, an analyst for Debon Securities in Shanghai.
Poly Real Estate Group, China's second-biggest developer, slumped 6.7 percent to 10.66 yuan, while rival China Vanke Ltd. gave up 4.1 percent to 7.18 yuan.
Oil prices tumbled as a low as $78.87 a barrel Thursday as the dollar continued to gain against the euro amid fears Europe's debt crisis will widen from Greece to engulf other nations.
Petroleum and Chemical Corp. known as Sinopec, dropped 5.6 percent to 9.33 yuan, while PetroChina Ltd., Asia's biggest oil and gas producer, dived 5.1 percent to 11.31 yuan.
China Shenhua Energy Ltd., the country's biggest coal producer, declined by 5.9 percent to 24.3 yuan.
Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, lost 2.2 percent to 4.4 yuan. Bank of China Ltd. and China Construction Bank Ltd. both shed 2 percent -- BOC to 4.05 yuan and CCB to 5.09 yuan. Midsize lender Shenzhen Development Bank Ltd. plummeted 7.5 percent to 18.4 yuan.
In currency markets, the yuan weakened to 6.8264 to the U.S. dollar, down from Wednesday's close of 6.8263.
