Chinese shares dropped 0.76 percent on Tuesday on weak confidence from investors.
The benchmark Shanghai Composite Index lost 0.76 percent, or 13.07 points, to close at 1,706.70. The Shenzhen index was down 2.68 percent, or 156.20 points, to close at 5,668.81 points.
The combined turnover was 34.8 billion yuan (5.09 billion U.S. dollars), compared with 32.11 billion yuan on the previous trading day. Losses outnumbered gains by 571 to 236 in Shanghai, and by 511 to 168 in Shenzhen.
Securities shares led the slide, as Haitong Securities -- the largest brokerage by market capitalization -- said it would end the lock-up period of its 3.5 billion non-tradable shares in December.
Investors worried this move might trigger a price plunge, said market dealers. Haitong Securities fell by the daily limit of 10 percent for the second day this week. It closed at 14.94 yuan.
Changjiang Securities fell 9.97 percent to close at 9.93 yuan, while Guoyuan Securities dipped 9.95 percent to close at 9.68 yuan.
In response to the market talk that several domestic leading steel producers might reduce production amid weak demand, coal suppliers saw their shares fell sharply on Tuesday, as coal is one of the most important material in steel production.
China Shenhua, the country's major coal producer slide 4.82 percent to 17.18 yuan. Datong Coal Industry closed at 11.33 yuan, down 6.29 percent. Jinniu Energy Resources dipped 9.99 percent to close at 11.44 yuan.
Analysts with Guangzhou Boxin Consultation Company attributed the price drop to weak confidence from individual and institutional investors, saying even leading enterprises saw their stocks suffer sell-off because of the weak confidence.
Analysts with Nanjing Securities said the negative impact of global financial woes would continue to pressure Chinese investors. The markets would remain dull in the coming few weeks.
<i>Source: Xinhua</i>
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