Beijing - Shares on China's two stock markets plunged by more than 5 per cent on Monday, following a similar fall on the previous trading day at the end of last week.

The key Shanghai Composite Index, which tracks shares traded in local and foreign currencies, lost 5.21 per cent of its value, ending the day down 135.65 points at
2,470.07.

The fall took the Shanghai index to its lowest point since December 2006.

The Shanghai Daily newspaper said Monday's fall was partly spurred by a forecast of a slowing post-Olympic economy by investment bank and analyst Goldman Sachs.

The government's announcement on Monday of a 10-per-cent, year-on-year rise in the monthly producer price index for China's industrial products in July also affected the stock markets, the newspaper said.

The smaller Shenzhen Composite Index also fell by 6.55 per cent, ending at 698.37 after losing 48.97 points on Monday.

The losses were the biggest in China for six weeks, surpassing another big fall of about 5 per cent on Friday that was attributed to investors' nervousness over effect of the Beijing Olympics on the economy.

The Shanghai index has lost more than half its value since hitting a record high in October.

Monday's plunge continued a period of strong daily fluctuations amid an overall downward trend in China's inflated share prices. (dpa)