China's shares slid 1.93 percent on Friday after Shanghai Automotive Co Ltd, the listed arm of China's biggest car maker SAIC, reported weaker-than-expected first-half profits. Shanghai Auto was one of the first major Chinese industrial companies to report first-half earnings, so its results hurt sentiment throughout the market.
Its stock plunged 9.4 percent to close at 5.00 yuan. The benchmark Shanghai composite index closed at 1,570.150 points, its lowest finish since June 15. Turnover in Shanghai A-shares was a thin 14.3 billion yuan ($1.8 billion), up slightly from a four-month low of 11.9 billion on Thursday.
"The index will continue to slide in August, as investors' waning confidence is likely to get hit further by upcoming first-half earnings reports," said Zhou Lin at Huatai Securities. But he saw strong short-term support between 1,500 and 1,550 points.
Fairly good technical support is believed to lie at the June low of 1,512 points - all major technical supports above that level have been broken in the past several days.
Shanghai Auto, owner of a fifth of General Motor's largest car venture in China, said first-half net profit rose 14 percent - much less than the 20 to 30 percent rise which analysts had predicted. Other listed automakers dropped in sympathy with Shanghai Auto, with Jiangling Motor off 4.8 percent at 8.38 yuan.
The metals sector also dragged the index down, after international copper prices tumbled on Thursday in response to interest rate hikes by the European and English central banks.
Jiangxi Copper Co, China's largest copper producer, slumped 4.2 percent to close at 9.70 yuan, while Zhongjin Gold plunged 9.9 percent to 17.09 yuan.
Bank of China, the largest stock on the Chinese bourses, lost 1.5 percent to end at 3.29 yuan, its lowest close since its listing in Shanghai in early July. One stock to buck the downtrend was oil refiner Sinopec, which edged up 0.3 percent to 5.92 yuan.
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