China Stocks Extend Heavy Losses

Chinese stocks dropped sharply Friday morning, extending Thursday's heavy losses. The Shanghai Composite Index fell 3.1%, after suffering a 3.5% decline on Thursday. Meanwhile, Hong Kong markets also dropped further, with the Hang Seng Index down 1.1%. In Hong Kong, Chinese airlines suffered broadly, after mainland media reports said China plans to merge the cargo operations of China's three biggest state-owned airlines, including Air China Ltd. , China Eastern Airlines Corporation Ltd. , and China Southern Airlines Co. Ltd. , and form Asia's largest air cargo operator. China Southern Airlines gave up 2.4%, Air China pulled back 1.5%, and China Eastern Airlines traded 1.4% lower. Chinese properties and financial shares also posted broad-based declines, with leading real estate developer China Vanke Co., Ltd. sagging 2.2%, Sino-Ocean Land Holdings Ltd. shedding 1.3%, China Construction Bank Corporation off 1.2%, and Industrial and Commercial Bank of China Ltd. moving 0.9% lower.