Chinese stocks retreated to fresh 22-month lows yesterday as investors remained deeply concerned about the outlook for the US financial system, with a local scandal over contaminated milk further undermining confidence.
The US government's $85bn rescue of AIG boosted markets in Japan and South Korea, but investors in China paid little heed as anxiety about the banking sector led shares down.
The Shanghai composite index dropped 2.9 per cent to 1,929.05, its lowest since November 2006. Volume remained extremely thin at Rmb31.8bn, compared with peak levels around Rmb267bn in the middle of last year.
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