THE Shanghai Composite Index plunged 2.57 percent in morning trade today as slumping home prices shook investor confidence.

The benchmark index deflated to 2,167.68 points as the market entered what seems likely to be its seventh week of losses. The property sector fell by 2.74 percent, with only four risers out of 128 companies in total.

Home prices further dropped in November, according to data released by the national statistics bureau yesterday.

China's 49 biggest cities out of 70 posted lower new home prices in November, that is more a half of all cities being watched by the government. New home prices among the major cities slid by 0.35 percent compared to October.

In the second hand home market, 51 cities posted dropping prices -- revealing an even grimmer situation than in the new home market.

"The declining of home prices in the two preceding months is only the start," said Shanghai Securities Times today. "The government is unlikely to relax its property curbing policies next year."

Source:shanghaidaily