Red chips and H shares yesterday extended their losing streak as concerns grew that the mainland might no longer be the economic bulwark for Asia's troubled economies. The Hang Seng red-chip index slumped 8.51 per cent to 934.92 points, the lowest point since it was introduced last June, while the Hang Seng H-share index reached its lowest level since January, sliding 6.8 per cent to 455.3 points. The sharp falls far outstripped the Hang Seng Index's 2.27 per cent decline to 8,391.46 points. Brokers said an avalanche of negative reports about economic growth and the stability of the yuan cast doubt on the mainland's ability to withstand the fallout of the region's financial crisis. The latest blows came in the form of comments from officials. Yesterday, People's Bank of China governor Dai Xianglong said a weak yen would hurt the mainland's trade and its utilisation of foreign capital. That followed comments on Monday by Vice-Premier Wu Bangguo, who said it would be difficult to achieve targeted 8 per cent economic growth for this year. The remarks gave further weight to doubts that Beijing will be able to hold the yuan at its present level. Samson Chau, a BNP Prime Peregrine assistant director, said: 'It all boils down to concerns whether the yuan's stability can be sustained in light of the yen's weakness. 'Yesterday's comments by mainland officials about the impact of the sinking yen on the mainland's economy and exports were worrying signs for investors,' he said. Some analysts suggested that parent companies of red chips, in anticipation of a yuan devaluation, had been selling their holdings in return for US dollars. They also blamed institutional short-selling of red-chip shares for the market's decline. China Resources Enterprise shares declined 10.28 per cent to $7.85, while Beijing Enterprises Holdings slid 9.82 per cent to $10.55 and Shanghai Industrial Holdings slumped 7 per cent to $17.70. Citic Pacific also continued its slide, falling 45 cents to $15.25. A DBS Securities analyst said hedge funds had chosen weaker stocks such as red chips and H shares as their selling targets. These shares accounted for most of the volume during yesterday's half-day trade. The analyst also said fund managers might find mainland stocks expensive, based on the assumption that the yuan would devalue in the long term. She said the red-chip sector should trade at a premium to the market, based on an estimated 10 per cent earnings per share growth for this year.But she said the H-share sector was expected to underperform because of its poor earnings outlook.