CHINA’S stocks fell sharply again yesterday, reaching eight-month lows, after the People’s Daily said that the nation’s economy is headed for an “L-shaped” recovery, stoking worries among investors that growth in the world’s second-largest economy will moderate further.

    Following the market’s nearly 3 percent slump Friday, the blue-chip CSI300 index fell 2.1 percent to 3,065.62, while the Shanghai Composite Index lost 2.8 percent to 2,832.11 points.

    Traders were taking stock of a report in the People’s Daily, which cited an “authoritative” person as saying that China’s economic growth trend would be “L-shaped” rather than “U-shaped” or “V-shaped” and the government will not use excessive investment or rapid credit expansion to stimulate growth.

    Such citations in the People’s Daily have frequently been associated with views by top officials and therefore carry extra weight among market participants.

    China April trade data, released Sunday, doused investor hopes of a sustainable economic recovery, with both exports and imports falling more than expected.

    Shares fell across the board, but selling concentrated in relatively expensive small caps amid fears of fresh regulatory crackdown on speculation.

    China’s securities regulator said Friday that the valuation gap between the domestic and overseas market and speculation on “shell” companies — firms used for backdoor listings — merited attention. (SD-Agencies)