Mainland shares plummeted by about 7 per cent yesterday on fears that the stock markets would be flooded with new shares issued by state enterprises in the coming months. Analysts said investors were dumping shares as soon as the markets opened, with the pace quickening in the last 75 minutes of trading as panic set in. Shanghai Finance Securities analyst Xu Bing said: 'Selling picked up sharply after 2.15 pm, showing that investors were expecting prices to drop further.' The selling pressure depressed the Shanghai A-share Index by 6.9 per cent to 1,151.435 points in one of the sharpest daily falls since Beijing's crackdown on excessive speculation in May and June. The bearish sentiment also affected B shares, which lost 3.42 per cent to 77.002 points, on turnover of 42 million yuan (about HK$39.02 million). In Shenzhen, the A-Share Index shed 7.22 per cent to 355.57 points, the lowest since February 20, on a turnover of 2.81 billion yuan. The B-Share Index lost 3.51 per cent to 129.37 points. Analysts said although leaders at the 15th party congress had indicated that more state enterprises would be listed, the impact of a possible flood of new shares only sank in yesterday. Selling was also triggered by Beijing's statement that it was prepared to give up controlling stakes in many state enterprises, which could pave the way for massive sales of until now non-tradeable state and legal-persons shares in listed companies. Analysts said given the bearish mood, companies allowed to issue shares under this year's A-share quota of 30 billion shares might want to delay their listing plans. Beijing sets a quota on how many new shares may be issued each year.