BEIJING, March 27 (Xinhua) -- China's benchmark Shanghai Composite Index plunged 5.42 percent Thursday, the biggest one-day loss in two months, led by a huge sell-off in No.1 index component PetroChina.

    The key index closed 195.36 points lower at 3,411.49, the lowest close since April 9 last year, after trading between 3,541.28 and 3,407.90. It has fallen 35 percent this year and 44 percent from its record high on Oct. 16.

    The Shenzhen Component Index fell 377.68 points, or 2.80 percent, to 13,111.41.

    Losing shares outnumbered gainer by 803 to 44 in Shanghai and by 635 to 40 in Shenzhen. Aggregate turnover rose slightly to 112.02 billion yuan from Wednesday's 104.69 billion yuan.

    The decline followed an overnight loss on Wall Street. The Dow Jones Industrial Average fell 0.88 percent to 12,422.86 on data that shows U.S. new home sales and durable goods orders slid further in February.

    Analysts said the market also suffered panic selling as the news that several shares fell below or near their initial public offering prices injected more pessimism into the market.

    PetroChina plummeted 8.31 percent to 16.99 yuan, near its IPO price of 16.7 yuan, and 65 percent off its record high of 48.62 yuan on its debut on Nov. 5. It said last week net income rose at a disappointing annual rate of 2.4 percent last year.

    Sinopec, Asia's largest refiner, dropped 8.45 percent to 11.38 yuan as crude oil price surged by four dollars on weak dollar and U.S. inventories. Officials with the oil giants denied Monday rumors of fuel price rises and said inflation should be taken into full account before any price rises.

    China Pacific Insurance fell another 7.47 percent to 25.89 yuan. It lost 8.11 percent to 27.98 yuan Wednesday, below its IPO price of 30 yuan for the first time, after 300 million shares became tradable after a lock-up period expired.

    China Shipping Container Lines Co. and China Coal Energy also broke their IPO prices. The former shed 5.65 percent to 6.51, below IPO price of 6.62 yuan. The latter plunged 9.93 percent to 16.69 yuan, below IPO price of 16.83 yuan.

    Steel shares were sharply lower, with Baoshan Iron and Steel falling 8.99 percent to 13.06 yuan after posting a 2.75 percent decline in 2007 net profit. Wuhan Iron and Steel tumbled 8.86 percent to 15.01 yuan.

    Gains in some property shares cushioned the slump. China Vanke gained 1.77 percent to 24.66 yuan and Gemdale added 4.88 percent to 37.17 yuan.

Editor: Gao Ying