China's main stock index tumbled 4.03 percent on Friday, closing below last year's finish, as large caps sagged and turnover continued shrinking amid concern over the government's attitude toward the market.
China Life plunged 7.24 percent to end at 35.99 yuan, its lowest close since it listed on January 9. It hit an intra-day low of 35.80 yuan, well below its previous record intra-day low of 37.00 yuan, recorded on listing day.
Traders said caution over government policy was causing investors to focus more on the very high valuations of financial stocks, and China Life was a target because of its much stronger-than-expected listing. The Shanghai Composite Index opened marginally higher but began sliding in the first half-hour. It closed at 2,673.212 points, only slightly off its intra-day low of 2,666.862, and below the index's end-2006 level of 2,675.474.
A total of 645 stocks fell while 228 rose. Turnover in Shanghai A shares was 64.6 billion yuan ($8.32 billion), active compared to last year but down from 69.1 billion on Thursday, suggesting investors were continuing to exit the market.
Banking heavyweight Industrial and Commercial Bank of China fell 3.60 percent to a one-month low of 4.82 yuan. It is now down 22 percent from its all-time intra-day high in late December, though still up 47 percent from the close on its listing day in October.
Among other large caps, China's biggest steelmaker, Baoshan Iron and Steel Co, was down 6.48 percent to 8.81 yuan, leading a general decline of the steel sector. It has dropped from a record closing high of 10.64 yuan on Tuesday. China Vanke China's biggest listed developer, fell 7.86 percent to a one-month low of 14.42 yuan.
Among the gainers, ship engine maker Hudong Heavy Machinery continued rising after Monday's announcement that it would buy assets from its parent. The stock jumped its 10 percent daily limit to a fresh record high of 60.74 yuan, after hitting record highs every day since Monday.