Chinese stocks extended losses Thursday as investors shrugged off calls by the market regulator to keep prices stable ahead of the Beijing Olympic games.
The benchmark Shanghai Composite Index fell 2.2 percent, or 60.95 points, to 2,775.72. The Shenzhen Composite Index dropped 2.9 percent to 827.59.
Comments by China Securities Regulatory Commission chairman Shang Fulin urging securities funds to help keep the markets stable, carried in state-run newspapers, appeared to do little to boost sentiment.
"Buying sentiment is weak on disappointment over the lack of any actual moves taken by government. I'm afraid that most investors are still waiting for a real chance to trade, not this so-called Olympics market," said Zhang Yang, an analyst for Oriental Securities in Shanghai.
Heavyweight airlines and refiners led the decline, following a rebound of more than US$4 a barrel in global crude oil prices overnight.
China Petroleum & Chemical Corp., or Sinopec, fell 5.3 percent to 11.20 yuan. Air China dropped 5.5 percent to 10.01 yuan and China Eastern Airlines sank 4.3 percent to 7.73 yuan.
Property shares also declined, with Poly Real Estate Group losing 7.4 percent to 15.60 yuan.
Speaking to a financial meeting in Beijing, Shang acknowledged "difficulties" in the markets, and noted the authorities' efforts to crack down on insider trading and other abuses.
"There has been no major change in the fundamentals and momentum of the healthy, stable development of the capital markets," the Shanghai Securities News quoted Shang as saying.
In currency dealings, the U.S. dollar was trading at 6.8318 yuan around 0800 GMT on the over-the-counter market, up from Wednesday's close of 6.8292.
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