Beijing - Shares in China's two stockmarkets plunged by nearly 4 per cent on Friday, following a regional fall prompted by the US Senate's failure to approve an emergency loan package for the auto industry.

The key Shanghai Composite Index, which tracks shares traded in local and foreign currencies, ended the day on 1,954.21, down 3.81 per cent, or 77.47 points.

The smaller Shenzhen Composite also lost nearly 4 per cent of its value, as the Shanghai Daily newspaper said investors were "taking profits due a gloomy economic outlook and fear of future losses."

Shanghai Daily played down the significance of the fall and said a rebound was expected soon.

"We think the fluctuation is normal and after more specific measures are announced in the future the index is likely to rebound," the newspaper quoted a research note by Donghai Securities as saying.

Combined turnover on the two markets reached 107.88 billion yuan (15.75 billion dollars), down from 127.78 billion yuan on Thursday. (dpa)