China stocks fell around 2 percent on Tuesday, led by energy and commodity-related shares as Chinese investors joined a global equity selloff triggered by fears of a sharp slowdown in the world economy. But trading remained thin - daily trading volume in Shanghai was just one-fifth of its early-June peak - reflecting a general "risk-off" mood ahead of a seven-day National Day Holiday that starts on Thursday.
Official factory and service sector activity surveys will also be published on Thursday. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 2.0 percent to 3,178.85 points, while the Shanghai Composite Index lost 2.1 percent to 3,038.14. "There are mounting concerns over the health of the global economy - growth in Europe, and Asia are both weak," said Zhou Lin, analyst at Huatai Securities, adding that a potential Federal Reserve rate hike later this year could hit emerging markets by luring capital back to the United States.
"In addition, people are not in a mood to trade ahead of the holiday." Stocks fell across the board on the mainland. There were 1,992 losers, but only 421 gainers. Energy and commodity-related stocks were among the biggest casualties, on fears that economic weakness would sap demand for raw materials.