Faltering PMI weighs on mainland markets

Stock markets on the Chinese mainland plunged Tuesday after fresh signs of weakness in the manufacturing sector provoked skeptical reappraisal of the country's growth prospects.

The Shanghai Composite Index dived 57.63 points, or 2.57 percent, to finish at 2,184.54, making it the day's worst performing Asian equity benchmark; while the Shenzhen Component Index surrendered 264.48 points, or 2.92 percent, to close at 8,793.13.

Both indices opened lower and sank for most of the day as the markets' weightiest sectors - including construction, property and most financial components - were driven into contractions by HSBC's preliminary manufacturing purchasing managers' index (PMI) for April. The widely-watched gauge of factory activity slipped to 50.5 for the current month, the lowest level in two months and down from the bank's final March reading of 51.6.

Construction-related equities extended their recent losses into Tuesday after reports surfaced that authorities in Guangzhou would soon require developers to put prices of new housing units online in order to ensure greater supervision by the city's housing authorities.

China Vanke Co dropped 3.51 percent despite reporting a 16 percent increase in first-quarter profits. Anhui Conch Cement Co declined 5.88 percent to 18.10 yuan ($2.92).

Financial shares were driven back by ongoing bond trading investigations as well as worse-than-expected 2012 financial results from brokerages. CITIC Securities, which had one of its executives arrested last week, lost 4.93 percent to 12.16 yuan. Ping An Bank Co slipped 5.68 percent to 19.08 yuan.

Equipment manufacturer China Resources Jinhua Co was one of the few stocks that climbed past the daily limit. The company charged to 9.85 yuan after news broke that its holdings would be bought out by a subsidiary of TV manufacturer Skyworth Digital Holdings Ltd.