China Stocks Plunge Friday

HONG KONG (AP) --- Chinese stocks underperformed badly Friday as panicked investors rushed to sell over fears that an extended bull market was coming to an end. Elsewhere, stocks traded softly as the standoff between Greece and its international creditors appeared little closer to being resolved.

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was down 0.7 percent at 6,784, while Germany's DAX fell 0.2 percent to 11,454. The CAC-40 in France bucked the trend, trading 0.2 percent higher at 5,049. Wall Street was poised for a steady opening with Dow futures and the broader S&P 500 futures up 0.1 percent.

GREEK TALKS: Global investors are watching closely as Greek debt talks go down to the wire. On Thursday, a key meeting of eurozone finance ministers on Greece's rescue package broke up without agreement. The 19 ministers are due to meet again on Saturday. Greece's creditors will not free up billions in bailout money until there's an agreement over economic reforms and budget cuts. Greece needs a deal to pay 1.6 billion euros ($1.8 billion) to the International Monetary Fund due Tuesday. Failing to do so would put the country on a possible path toward default and exit from the euro.

ANALYST TAKE: "While these deadlines can quite often be taken with a pinch of salt, Greece has literally run out of time on this occasion," said Craig Erlam, senior market analyst at OANDA. "If we see a Greek deal then there will be cause for celebration while no deal could create panic."

SHANGHAI SLUMP: While Greece has been the main driver in financial markets over recent weeks, worries over China have risen up the list of concerns. On Friday, Chinese stocks plunged. After a sizzling rally that more than doubled Shanghai's benchmark index over the past year, investors are now heading for the exit. One factor appears to be authorities tightening rules on margin financing, which involves using borrowed money to buy stocks. The market's drop may also be exacerbated by the herd mentality of retail investors, who play an outsize role in China's markets, or by margin investors being forced to sell off to meet margin calls.

ANALYST INSIGHT: "Although I continue to be optimistic about the longer-term trend of the China markets, it's clear that we are in a sharp correction phase," said Bernard Aw of IG Markets in Singapore. He said up until Thursday, $1.2 trillion had been wiped off of China's equity markets since they peaked June 14 at $10 trillion.

ASIA SCORECARD: The Shanghai Composite Index in mainland China plunged 7.4 percent to close at 4,192.87, bringing its losses for the week to 12.4 percent. The smaller Shenzhen Composite Index tumbled 7.9 percent to 2,502.96. Chinese worries dented sentiment across Asia, particularly in Hong Kong, where the Hang Seng index ended 1.8 percent lower at 26,663.87. Japan's benchmark Nikkei 225 index lost 0.3 percent to 20,706.15 while South Korea's Kospi gained 0.3 percent to 2,090.26. Australia's S&P/ASX 200 shed 1.5 percent to 5,545.90.

ENERGY: Benchmark U.S. crude oil fell 20 cents to $59.50 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 3 cents to $63.17 in London.

CURRENCIES: The euro was flat at $1.1207 while the dollar was down 0.2 percent at 123.39 yen.

(KA)