·Chinese shares take the deepest single-day plunge in more than one year Tuesday.
·The benchmark Shanghai Composite Indexdived 7.73 percent to end at 3,072.33 points.·The Shenzhen Component Index fell 8.25 percent, or 968.07 points, to 10,765.91 points.

 

An investor reads information at a securities exchange hall in southwest China's Chongqing Municipality, June 10, 2008. The benchmark Shanghai Composite Index closed at 3,072.33, down 7.73 percent, while the Shenzhen Component Index on the Shenzhen Stock Exchange ended at 10,765.91 points, down 8.25 percent.  (Xinhua  Photo)

BEIJING, June 10 (Xinhua) -- Chinese shares took their biggest single-day plunge in more than one year after the three-day Dragon Boat Festival holiday as investors became nervous about the impact of the country's latest move to tighten credit.

The benchmark Shanghai Composite Index, which covers A and B shares, dived 7.73 percent to end at 3,072.33 points on Tuesday, the biggest plunge since June 4, 2007, when the key index plummeted 8.26 percent.

The Shenzhen Component Index fell 8.25 percent, or 968.07 points, to 10,765.91 points.

Combined turnover on the two bourses totaled 89.30 billion yuan(12.76 billion U.S. dollars).

The increase in reserve requirement ratio, upcoming China Construction's A-share debut and financial woes in neighboring Vietnam all added pressure to the market, Greatwall Securities analyst Yan Hong told Xinhua Tuesday.

The People's Bank of China (PBOC), the country's central bank, on Saturday ordered lenders to set aside more money for reserve, the fifth such move this year.

Investors read information at a stock trading hall in Shanghai, China, June 10, 2008.  (Xinhua  Photo)

The reserve-requirement ratio would be raised by 0.5 percentage point on June 15, and another 0.5 percentage point on June 25, which would bring the ratio to a record high of 17.5 percent.

Shares of banks and property companies, industries most likely to feel pressure from the increase, led the decline.

The Industrial and Commercial Bank of China (ICBC), the country's largest lender, shed 8.35 percent to 5.38 yuan, while the Bank of China (BOC), the country's second largest lender, lost7.87 percent to 4.33 yuan. Vanke Group, the country's top real estate firm, slipped by the daily 10 percent limit.

China State Construction Engrg. Corp. has got regulatory approval to issue 12 billion A-shares, the country's largest initial public offering (IPO) in 2008. It expected to raise more than 40 billion yuan.

The record high price of crude oil also affected market sentiment, Yingda Securities analyst Li Daxiao said, with stocks of airliners and oil producers suffering heavy losses.

Sinopec, Asia's top oil refiner, sank 8.39 percent while PetroChina, the country's largest oil producer, lost 6.06 percent. Airliners fell across the board with China Eastern Airlines and Hainan Airlines dropping by the maximum limit of 10 percent. 

Source: Xinhua