(Xinhua)
Updated: 2008-02-22 13:37

Chinese share prices tumbled 2.99 percent in the morning trade on Friday, following the overnight sharp decline on the Wall Street.

The benchmark Shanghai Composite Index, which covers both A and B shares, fell 135.27 points, or 2.99 percent, to 4,391.90. It opened down 26.79 points, or 0.59 percent, at 4,500.39.

Special Coverage: Markets Watch   Related readings:  23 listed firms plan $28.6b refinancing  New funds could bring $11bn into equities  Pudong Bank plans $5.6b share sale  Two stock funds raise $391 on debut

Overnight, the Dow Jones Industrial Average tumbled 142.96 points, or 1.15 percent, to 12,284.30 as the newly-released weak economic data heightened fears of the US recession.

The US Conference Board said Thursday the January index of leading economic indicators fell 0.1 percent, the fourth-monthly drop in a row. Meanwhile the Philadelphia Fed index, a regional reading on manufacturing, tumbled to -24.0 this month from -20.9 in January.

Financial stocks led the declines and the investors should be cautious with the news of huge amounts of capital raising, according to Wan Bing, an analyst with Guangfa Securities.

Shanghai Pudong Development Bank ended the morning session 6.73 percent lower at 40.32 yuan, after the bank confirmed Thursday it planned to sell additional shares to boost core capital.

Shares in the mid-sized bank has plunged more than 20 percent after market talk on Wednesday said it planned to raise as much as 40 billion yuan ($5.6 billion) by public offering. Investors worried the huge share sale would dilute earnings and add to liquidity pressures to the equity markets.

China Merchants Bank tumbled 6.21 percent to 30.20 yuan after it said Friday that its 2.53 billion A shares would become tradable on February 27.

Citic Securities, the country's largest brokerage, dropped 5.64 percent to 63.40 yuan. China Life, the nation's largest life insurer, was down 4.23 percent to 38.30 yuan.

China Petroleum and Chemical Corp (Sinopec) fell 5.03 percent to 17.00 yuan despite it denied market talk of plan to raise about 60 billion yuan (8.4 billion US dollars) by selling additional five billion shares.

Property and steel stocks also fell sharply. Gemdale Corp. led the declines in real estate firms by plummeting 8.44 percent to 40.59 yuan.

Steel stocks slid as investors locked in profits after recent rally. Wuhan Iron and Steel shed 6.15 percent to 20.89 yuan and Baoshan Iron and Steel lost 3.86 percent to 17.70 yuan.