SHANGHAI, Oct 23 — China’s blue-chip share index closed at its lowest level in four-and-a-half years today, with investors dumping tech sector stocks and others as global market jitters compounded lingering worries over domestic economic health.

The CSI300 Index .CSI300 fell 1 per cent to its lowest closing level since February 2019. The Shanghai Composite Index .SSEC, which broke the psychologically important 3,000-point level last week, slid 1.5 per cent to a near one-year low.

The recent fall in global markets, a spike in jitters, and a shaky dollar "looks like global risks emerging”, Zhang Chi, strategist of Sinolink Securities, wrote in a note.

Systemic global risks could kill the rebound of A-shares in the bud, so "we don’t see a market bottom this year”, Zhang added.

Israel bombarded Gaza with air strikes early today and its aircraft struck southern Lebanon overnight, heightening worries about a widening Middle East conflict.

Global volatility spiked as investors stayed concerned about the Gaza conflict spreading, while it’s not yet certain that global rate hikes are over, Maybank wrote in a note on Monday.

Such risks weigh on already gloomy sentiment in China, where the economy continues to creak under a deepening property crisis despite Beijing’s slew of stimulus measures.

"A big problem of current stock market is that sentiment is overly pessimistic,” said Zhou Zhiyang, fund manager at Jiahe Private Fund Management Co.

"But whether the underlying value is truly this low deserves a question mark.”

In addition, recent measures by China’s securities regulator to restrict short-selling activities have led to forced selling by some hedge fund managers using long-short strategies, fund manager Yang Tingwu said.

"It’s a man-made crisis” caused by well-intended, but ineffective policies, said Yang, general manager of asset manager Tongheng Investment.

Sentiment was not helped by Goldman Sachs data showing foreign exchange outflows from China rose sharply to US$75 billion in September, the biggest monthly figure since 2016.

Shares in China fell across the board.

Tech stocks led the declines, with the STAR 50 index .STAR50 slumping 2.5 per cent to record lows.

Shares of Foxconn Industrial Internet Co. 601138.SS sank 10 per cent to five-month lows on media reports its parent company Foxconn 2317.TW, a major supplier of Apple’s AAPL.O iPhones, was the subject of tax audits and land use probes in China.

Hong Kong market is closed today for a public holiday. — Reuters