China stocks fell on Wednesday, hit by falls in global markets and weak domestic factory activity that has raised fears of a sharp economic slowdown. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 2.3 percent, to 3,263.03, while the Shanghai Composite Index lost 2.2 percent, to 3,115.89 points. China's September flash PMI, which measures activity in the country's factory sector, unexpectedly shrank for the seventh month in a row to the lowest level in 6-1/2 years, a private survey showed.
Sentiment at Asia's biggest firms tumbled in the third quarter at a record pace due to growing worries about the economic slowdown in China and the risks it poses to the global outlook, a Thomson Reuters/INSEAD survey showed. All main sectors fell with heaviest losses seen in the CSI300 Energy Index, which lost 3.5 percent. But small caps outperformed with Shenzhen's start-up board ChiNext gaining 0.2 percent at the close.
China's biggest steelmakers such as Baoshan Iron & Steel Co Ltd fell over 3 percent, on fears that economic cooling would sap demand for the metal. CITIC Securities tumbled 4 percent. An initial probe found that CITIC illegally profited from China's government-orchestrated stock rescue scheme, Bloomberg reported on Wednesday, citing sources.