Tamil Diplomat

Chinese shares drop in dramatic slide

The mainland benchmark index, the Shanghai Composite, fell sharply by 8.4% to 3,211.75 points, extending last week’s losses.The sell-off continued despite China’s latest attempts to reassure investors.

Over the weekend, Beijing said it planned to let its main state pension fund invest in the stock market.Under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically-listed shares.

The fund will be allowed to invest not just in shares but in a range of market instruments, including derivatives. By increasing demand for them, the government hopes prices will rise.

The Hong Kong Hang Seng index followed the mainland’s sharp decline, dropping 4% to 21,523.57 points in early trade.