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China Leads Asian Stock Market Tumble

Asian markets headed lower Monday, with Chinese shares leading the plunge by shedding a massive 6.7 percent and Japanese stocks edging down after the country's opposition party came to power in a landslide victory.

The benchmark Shanghai Composite Index lost 192.94 points Monday to 2,667.75, its lowest close in more than three months.

The Shenzhen Composite Index of China's second, smaller exchange tumbled 7.2 percent to 904.14.

Investors began selling heavily last week on concerns that banks will cut back on the lavish lending that had helped push shares up more than 80 percent by early August.

Bank lending in August declined further following July's sharp fall from the previous month, state media reports say.

Further discouraging buying sentiment, last week the government said it will try to curb overcapacity and excessive investment in industries including steel and cement - a possible side effect of its massive stimulus plan.

Economists say such measures are merely aimed at fine-tuning and balancing growth that has been driven largely by government-backed stimulus spending. But they did not sit well with China's hypersensitive investors.

"Investors were a bit over-positive a month ago, and now they've turned a bit overly pessimistic," said Peng Yunliang, an analyst at Shanghai Securities in Shanghai.

In Japan, investors tread cautiously after the Democratic Party of Japan swept to power in national elections over the weekend amid frustrations with the ruling party as the world's second-economy emerges from its worst downturn in decades.

Tokyo's Nikkei 225 stock average was down 38.72 point, or 0.4 percent, at 10,495.42.

Hong Kong's Hang Seng lost 1.8 percent to 19,734.71.

Elsewhere, Korea's Kospi was down 1.1 percent and India's Sensex dropped 1.2 percent to 15,730.61. Australian shares were down 0.1 percent.

Wall Street ended last week on a down note, with the Dow falling 36.43, or 0.4 percent, to 9,544.20 in somewhat quiet trade.

The Standard & Poor's 500 index fell 2.05, or 0.3 percent, to 1,027.76, while Nasdaq composite index rose 1.04, or 0.1 percent, to 2,028.77.

With Wall Street futures lower, U.S. markets were poised for more losses on Monday. Dow futures were down 56, or 0.6 percent, at 9,480 and S&P futures shed 4.7, or 0.5 percent, to 1,022.70.

Crude oil prices dropped in Asia, with the benchmark contract for October delivery lower by 44 cents at $72.30 a barrel. The contract rose 25 cents on Friday.

The dollar fell to 92.66 yen from 93.42 yen. The euro traded lower at $1.4281 from $1.4306.

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