China shares slump as investors dump over-valued sectors; SMIC tumbles

China's benchmark Shanghai Composite Index ended at its lowest close since late July as investors sold off sectors seen as over-valued, and as the reported possible blacklisting of China's largest chip maker by the United States hit tech firms.

China's benchmark Shanghai Composite Index ended at its lowest close since late July as investors sold off sectors seen as over-valued, and as the reported possible blacklisting of China's largest chip maker by the United States hit tech firms. ** At the close, the Shanghai Composite index was down 1.87% at 3,292.59, the lowest closing level for the index since July 30. It was the fourth straight day of losses for the Shanghai index, and its steepest one-day drop since July 24. ** The blue-chip CSI300 index tumbled 2.11%, also its biggest daily drop since July 24. ** Losses accelerated in the afternoon session, led by the consumer staples sector, which slumped 2.88%, health care shares, down 3.36%, and financials , down 1.14%. ** Health care shares are still up 43.18% for the year, and consumer firms have gained 49.28%. The Shanghai stock index is up 7.9% and the CSI300 has risen 14% for the year. ** "Optimistic expectations for the economy are clearly overdrawn, and it has become market consensus that some sectors are very expensive," Jianghai Securities analysts said in a note. ** "We believe that high valuations mean the market will correct to a reasonable level and that a market decline is inevitable. It's just a matter of the trigger," they added. ** Shares of China's largest chipmaker, SMIC, plummeted 11.29% in Shanghai. ** The Trump administration is considering whether to add SMIC to a trade blacklist, a Defense Department official told Reuters, as the United States escalates its crackdown on Chinese companies. ** The CSI IT sub-index fell 2.94%. ** The smaller Shenzhen index ended down 2.22% and the start-up board ChiNext Composite index was 3.329 weaker%. ** At 07:07 GMT, the yuan was quoted at 6.832 per U.S. dollar, 0.17% firmer than the previous close of 6.8435.