China stocks extend losses Tuesday to hit three-week low

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Chinese shares hit a three-week low on Tuesday, with the benchmark Shanghai Composite Index down 25.97 points, or 0.88 percent, to rest at 2,938.98.

The Shenzhen Component Index fell 59.52 points, or 0.48 percent, to rest at 12,448.48.

Combined turnover dropped to 194.42 billion yuan (about 29.19 billion U.S. dollars) from 243.77 billion yuan the previous trading day.

Losers outnumbered gainers 655 to 229 in Shanghai and 934 to 277 in Shenzhen.

The shrinking market turnover reflects a lack of investor confidence, said analysts.

"The lower-than-expected 2010 performance of some listed companies caused a sharp fall of the key index on Tuesday," Zhongzheng Investment Consulting Co. analyst Zhang Suoqing said.

Rumor that China's banking regulatory body is considering raising the capital adequacy ratio requirement of the country's five biggest lenders also spiked the market. The rumor was denied by the China Banking Regulatory Commission on Tuesday after the market closed.

Tourism stocks and hotels led the fall by dropping 3.99 percent on Tuesday, with Yunnan Tourism Co., Ltd. and Lijiang Yulong Tourism Co., Ltd. down 7.2 percent and 4.64 percent to 13.27 yuan per share and 31.66 yuan per share, respectively.

Gold shares also showed weak performances. Zhongjin Gold Corp., Ltd. lost 4.31 percent to 37.55 yuan per share, while Zijin Mining Group Co.Ltd. dipped 3.02 percent to 7.72 yuan per share.

Banks bucked the market trend and rose briskly Tuesday on strong first quarter performances. Huaxia Bank Co., Ltd. was up 1.91 percent to 13.33 yuan per share, and Bank of Nanjing Co., Ltd climbed 1.1 percent to 11.03 yuan per share.