Chinese shares closed 3.04 percent lower on Wednesday, falling for the third consecutive day, driven by financial and brokerage shares.
The decline followed falls by other Asian markets amid concern over the worsening global financial crisis, analysts said.
The benchmark Shanghai Composite Index dropped 3.04 percent, or 65.61 points to end at 2,092.22 points. The Shenzhen Component Index closed at 6,924.49 points, down 256.79 points, or 3.58 percent.
Aggregate turnover was 57.5 billion yuan (8.4 billion U.S. dollars). Losses outnumbered gains 1,350 to 245, while 113 stocks were unchanged.
The heavy slumps on peripheral markets pressured the Chinese markets and depressed investor confidence, Galaxy Securities analyst Li Feng said.
Financial stocks went lower. The Industrial and Commercial Bank of China, the country's largest lender, shed 2.16 percent to 4.07 yuan. China Construction Bank was down 5.37 percent to 4.23 yuan and China Merchants Bank declined 8.34 percent to 14.29 yuan. China Life, the country's largest life insurance company, lost 9.08 percent to 20.82 yuan.
Brokerage firms fell across the board on profit-taking, erasing previous gains boosted by the launch of an indefinite trial of short selling, which allows traders to sell borrowed stocks in the hope of buying them back at a lower price, Li said.
Guoyuan Securities dropped by the daily 10 percent limit to 16.73 yuan. Hongyuan Securities slumped 9.97 percent to 16.34 yuan while Citic Securities lost 6.64 percent to 20.8 yuan.
Agriculture-related stocks gained, however, as investors anticipated favorable policies at the third Plenary Session of the 17th Communist Party of China Central Committee running from Thursday to Sunday.
Shares of Xinjiang Guannong Fruits and Antlers Co. surged 7.73 percent to 29.67 yuan. Hefei Fengle Seed Co. shares added 4.53 percent to 10.15 yuan.
(Xinhua News Agency October 8, 2008)
