Faltering PMI, Fed remarks crush shares

Stock markets in Shanghai and Shenzhen took a beating Thursday after US Federal Reserve Chairman Ben Bernanke signaled that the central bank may tap the brakes on its bond purchasing program later this year.

The Shanghai Composite Index fell 59.43 points, or 2.77 percent, to close at 2,084.02; while the Shenzhen Component Index surrendered 3.25 percent, or 273.76 points, finishing at 8,147.48.

Both markets opened lower Thursday and spent most of the day drifting deeper into negative territory, with fresh signs of weakness in the manufacturing sector later in the day adding to the gloomy tenor.

The preliminary HSBC China manufacturing purchasing manager's index (PMI) for June came in with a headline reading of 48.3, down from a final reading of 49.2 in May and marking a nine-month low for the widely watched gauge of factory activity.

The Shanghai Composite bottomed out on the day at a six-month low as concerns about the slumping domestic economy sent banking, coal, nonferrous metals and automobile stocks contracting along with equities in most of the market's cornerstone segments.

Trading sentiment remained mild though as most investors hunkered down against the headwinds. Combined turnover at the mainland's two exchanges eased to 147.3 billion yuan ($24.01 billion), down from Wednesday's 152.7 billion yuan.

In banking stocks, Ping An Bank Co lost 6.21 percent to 11.18 yuan. Shanghai Pudong Development Bank Co shed 5.29 percent to 8.42 yuan.

The bearishness was just as bad in the nonferrous metals sector, where Ningbo Yunsheng Co ditched 7.45 percent to 15.65 yuan. Yunnan Lincang Xinyuan Germanium Industrial Co surrendered 6.67 percent to 12.17 yuan.

Among auto makers, Faw Car Co slide 6.24 percent to 13.38 yuan.