By  on June 11, 2008

BEIJING — China's benchmark stock index tumbled 7.7 percent on Tuesday — the steepest decline in a year — underscoring a growing unease among investors about long-term prospects for economic stability.

The Shanghai Composite Index fell by 257 points in the first day of trading since the Chinese central bank said over the weekend that it would tighten credit outflows by raising reserve ratios on consumer banks by 1 percent this month to a record-high level. With the markets closed for the Chinese Dragon Boat Festival on Monday, Tuesday was also the first day of trading since the price of oil hit $140 a barrel, another likely factor in the sell-off, economists said.

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