Apr. 21, 2008 (China Knowledge) - Mainland stocks suffered sell-offs and dived nearly 4% on Friday after the biggest index component PetroChina<601857><857><PTR> fell below its IPO price of RMB 16.70.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, slumped 3.97% or 128.07 to 3,094.67 points after fluctuating between 3,203.71 and 3,078.17 points, the lowest in more than a year.

Similarly, the Shenzhen Component Index on the smaller Shenzhen Stock Exchange moved down 3.13% or 365.04 points to 11,292.04 points after touching an intraday low of 11,218.40 points.

The combined turnover on the two bourses shrank to RMB 78.5 billion from RMB 90.2 billion of the previous trading day.

PetroChina, the nation's top oil producer and the No.1 heavy weight stock on mainland bourse, dropped 5.04% to RMB 16.02, breaking its IPO price for the first time. After hearing the news, Investors lost their confidence and started to sell off.

Most heavy weights reported losses. Sinopec<600028><386><SNP>, china's largest oil refiner, plunged 7.54% to RMB 10.43. Aluminum Corp of China (Chalco)<601600><2600><ACH> lost 5.67% to RMB 18.98. Bank of China<601988><3988>, second largest lender, shed 4.04% to RMB 4.51.

On the positive side, Industrial Bank Co<601166> bucked the dropping trend with its shares rose 2.82% to RMB 34.64. CITIC Securities<600030> moved up 1.44% to RMB 52.90.

Market sentiment is extremely weak now and the downturn will continue in the short term, analysts said.

As a whole, losers outweighed winners by 771 to 51 in Shanghai and 609 to 38 in Shenzhen.