July 2 (NBD) -- Over 20 stocks on the Shanghai and Shenzhen stock markets plummeted by the daily limit of 10 percent in the morning session Monday, 7 of which hit the limit-down just one hour after the market opened.

NBD noticed that those 7 stocks, Zhejiang Jiahua Energy Chemical Industry Co.,Ltd. (600273.SH), Europol Intelligent Network Co., Ltd. (002711.SZ), Shenzhen Soling Industrial Co., Ltd. (002766.SZ), Shandong Ruyi Woolen Garment Group Co., Ltd. (002193.SZ), Zhongzhu Healthcare Holding Co.,Ltd (600568.SH), Weifang Yaxing Chemical Co., Ltd. (600319.SH) and Dasheng Times Cultural Investment Co., Ltd. (600892.SH), all have trust firms as their top holders of circulating shares.

Taking Zhongzhu Healthcare Holding as an example, three trust companies and one securities investment fund are among the top ten holders of circulating shares of the healthcare company, according to data released in late March, this year.

Industry insiders said that to prevent against unexpected stock plunge similar to above-mentioned cases, investors should take precautions such as enhancing research on fundamentals including corporate businesses and financial data of the listed company as well as the industry in which the company is operating. The insiders also warned investors against enterprises which employed high leverage, operated on heavy debt and pledged an excessively high proportion of company assets.

It's also noticed that many stocks kept sliding amid market downturn and some structural products were approaching a level that positions should be closed and were forced into liquidation.

Email: gaohan@nbd.com.cn