China stocks down 8 pct, banks and insurers lead

Tue Jan 22, 2008 6:50am GMT

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(For Hong Kong stock market reports, click [.HK])

SHANGHAI Jan 22 (Reuters) - China's main stock index plunged more than 8 percent on Tuesday afternoon as shares in the country's two biggest life insurers fell their 10 percent daily limits, and shares in several major banks dropped almost as much.

The Shanghai Composite Index .SSEC, which was down 4.07 percent at midday, was 8.03 percent lower at a five-month low of 4,519.706 points about 15 minutes before the close.

The market is being hit by tumbling overseas stock markets, and by the prospect of large supplies of new shares from equity offers in the pipeline, after Ping An Insurance (601318.SS) (2318.HK) announced at the weekend a plan to sell new A shares and convertible bonds that could raise some $19 billion.

Shares in Ping An as well as China Life (601628.SS)(2628.HK), the country's biggest life insurer, dropped 10 percent.

Industrial & Commercial Bank of China, the biggest bank, lost 9.92 percent. ($1 = 7.24 yuan) (Reporting by Claire Zhang, Editing by Andrew Torchia)

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