China stocks tumble on weak factory activity

SHANGHAI (Reuters) - China stocks fell on Wednesday, hit by falls in global markets and weak domestic factory activity that has raised fears of a sharp economic slowdown.

The CSI300 index <.CSI300> of the largest listed companies in Shanghai and Shenzhen fell 2.3 percent, to 3,263.03, while the Shanghai Composite Index <.SSEC> lost 2.2 percent, to 3,115.89 points.

China's September flash PMI, which measures activity in the country's factory sector, unexpectedly shrank for the seventh month in a row to the lowest level in 6-1/2 years, a private survey showed.

Sentiment at Asia's biggest firms tumbled in the third quarter at a record pace due to growing worries about the economic slowdown in China and the risks it poses to the global outlook, a Thomson Reuters/INSEAD survey showed.

All main sectors fell with heaviest losses seen in the CSI300 Energy Index <.CSI300EN>, which lost 3.5 percent.

But small caps outperformed with Shenzhen's start-up board ChiNext <.CHINEXTC> gaining 0.2 percent at the close.

China's biggest steelmakers such as Baoshan Iron & Steel Co Ltd <600019.SS> fell over 3 percent, on fears that economic cooling would sap demand for the metal.

CITIC Securities <600030.SS> tumbled 4 percent.

An initial probe found that CITIC illegally profited from China's government-orchestrated stock rescue scheme, Bloomberg reported on Wednesday, citing sources.

(Reporting by the Shanghai Newsroom; Editing by Jacqueline Wong)

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