China stocks end at 8-month low as confidence ebbs

China's main stock index closed down nearly 4 percent on Tuesday, hitting a fresh eight-month low as investors dumped newcomers listed this year and panic selling set in after months of nagging weakness.

The benchmark Shanghai Composite Index <.SSEC> tumbled 3.96 percent to finish at 3,668.897 close, its lowest close since July 5, 2007, when it ended at 3,615.872.

"Investor confidence collapsed," said Ren Chengde, senior stock analyst at Galaxy Securities. "We see no near-term floor."

Brokers said investors were also dissappointed that little attention was given to the stock market by Premier Wen Jiabao's post-parliamentary news conference in the morning while the market was falling to an eight-month low.

Recently listed shares led Tuesday's fall, presenting another bad omen as this group typically outperforms the market with stronger growth potential just after fund-raising.

China Railway Construction <601186.ss>, the second most active stock, ended down 3.24 percent at 11.04 yuan after hitting 10.60, its lowest level since its market debut on March 10.

China Unicom <600050.ss>, the most active stock of the day, dropped 2.75 percent to 8.85 yuan after outperforming the market in recent weeks. It had been bolstered by rumours of an industry restructuring and was one of the few stocks in which investors could still see some profit potential after the recent market slump.

The market is down 40 percent from its record high of 6,124 points touched in mid-October, hit by worries over the economy, huge fund-raising plans by large companies, including Ping An Insurance <601318.ss>, and weak global markets.

Ping An closed down 5.7 percent at 56.41 yuan on Tuesday, approaching levels not seen since the early days after its listing in March last year.

The stock has shrunk to about one-third the value of its trading peak of nearly 150 yuan in late October.