Shanghai index plummets nearly 2% amid recession fears on global economy

China’s A-share markets finished Monday lower, with the three major indexes all retreating into negative territories, as worldwide economic recession weighs on investors’ sentiment.

The two bourses opened lower, triggered by plunges in global major stock markets, with the benchmark Shanghai Composite Index trembling by 1.97 percent or 61.12 points to finish at 3,043.03.

The smaller Shenzhen Component Index slumped by 1.80 percent to end at around 9,701.70 points, while the ChiNext Index, China’s Nasdaq-style board of growth enterprises, was down 1.48 percent to finish at 1,668.84 points.

The combined turnover of the two bourses came to 819.3 billion yuan (US$121.9 billion), up from 801.9 billion yuan the previous trading day.

Non-banking financial sector led the losses, with shares of Lucion, the first domestically-listed venture capital, slipped by 9.64 percent to stand at 25.95 yuan a share.

Equities of communications and building material companies were also among the big losers.

Zhu Bin, a senior analyst at Southwest Securities, was quoted by Caixin.com as saying that as European and American economies are gradually showing signs of recession, it will exert a significant impact on the A-share market.

In March, factory activities out of Europe contracted at the fastest pace in nearly six years, according to media reports.

What added to the investors’ concern was the outlook for the world’s largest economy. Last Friday, the spread between the three-month Treasury bill and the 10-year note went negative for the first time in more than a decade, which is often considered as a signal of an economic slowdown on the way.