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China index drops following Wen comments

  • Story Highlights
  • Shanghai Composite Index falls nearly 5 percent in Tuesday trading
  • Drop follows remarks by premier warning against premature optimism on recovery
  • Nation's GDP rose by 7.1 percent in first half of 2009
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(CNN) -- China's stocks fell on Tuesday, one day after the nation's premier warned against overly optimistic signs of a recovery from the global financial downturn.

The Shanghai Composite Index had dropped 4.97 percent by mid-afternoon Tuesday. The index has dropped about 17 percent so far in August.

The Shanghai index tracks the bigger of China's stock markets, covering both A and B shares. Learn more about types of shares traded in China

The drop followed comments made by Premier Wen Jiabao on Monday during a trip to east China's Zhejiang province.

"There are still a lot of unstable and uncertain factors ahead and the economic situation ahead is still very grave, although both the world economy and the national economy are making positive changes now," Wen said in reports carried by the state-run news agency Xinhua.

China's gross domestic product rose by 7.1 percent in the first half of 2009, a full percentage point higher than the first quarter, Xinhua reported.

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