HONG KONG (MarketWatch) -- Chinese shares closed sharply lower Wednesday as the benchmark Shanghai Composite Index fell 5% to close at 3,266.43 on disappointing Chinese corporate profits, and falling commodity prices and fears of possible central bank moves to tighten lending.

The loss erased most of the gains made over the previous five sessions, and marked the Shanghai index's biggest percentage drop since Nov. 18, when it tumbled 6.3%. Daily volume hit a record 302.81 billion yuan ($44.3 billion).

As the drop in Shanghai become more pronounced in the afternoon, other Asian markets including Hong Kong and Mumbai fell, with the Hang Seng Index ending down 2.4%. The Sensex had recently given up 1.3% in afternoon trading.

Francis Lun, general manager at Fulbright Securities, said the Chinese markets tumbled from "an unattainable level because of hot money, and there are fears the central government will act to cool the markets."

 

Central bank

Leading the declines in Shanghai, China Cosco Holdings /quotes/comstock/22h!e:1919 (HK:1919 10.82, -0.78, -6.72%) /quotes/comstock/11i!cico.y (CICO.Y 7.65, +0.23, +3.11%) tumbled 8.4%, while Jiangxi Copper /quotes/comstock/11i!jixay (JIXA.Y 84.80, -6.20, -6.81%) /quotes/comstock/22h!e:358 (HK:358 16.32, -1.52, -8.52%) lost 9% after saying it expects first-half net profit to drop between 57% and 64% from a year earlier. Both had hit their daily limit of a 10% decline. In Hong Kong, China Cosco fell 6.7% while Jiangxi lost 8.5%.

Shanghai's decline, which at one point reached 7.7% before recovering slightly, came despite successful debuts for two China-linked stocks. China State Construction Engineering Corp. and cement maker BBMG both jumped on their debut.

In Shanghai, CSCEC shares ended at 6.53 yuan compared with the initial public offering price of 4.18 yuan -- though the finish was toward the lower end of the stock's trading range for the day. Earlier, the stock jumped as high as 7.96 yuan. The $7.3 billion IPO - the world's biggest so far in 2009 - was heavily oversubscribed. Shares of BBMG /quotes/comstock/22h!2009 (HK:2009 9.97, 0.00, 0.00%) ended at HK$9.97 in Hong Kong, also well above its IPO price of HK$6.38.

Sure, I dun mind, it is good to exchange opinions.

I too think, it could probably be some consolidation, looking at today's candle pullback from its low toform a long shadow n not braking below yesterday's low.

But. as to whether STI will reach 2650 again by tis week or early nx week, tat I really dun know.

I hope you dont mind, and rich tan also dont mind,

just look at the way market go for today, and you already got the answer, dont need to ask,

i dont know about blues chips, but for penny and s chip , just look at them today,it is obvious, if u still doubt,then it is yours to lose.