The Shanghai and Shenzhen bourses closed lower on Tuesday's morning sessions, as the country's security market regulator failed to meet investors' exceptions for favorable policy announcement on Monday.

The Shanghai Stock Exchange closed its morning session with its Composite Stock Index at 1,112.16 points, down 12.48 points, or 1.11 percent lower from Monday's close, while the Component Stock Index on the Shenzhen Stock Exchange closed at 2,876.27 points, down 38.69 points, or 1.33 percent lower.

Total trading volume for the two markets stood at 6 billion yuan (nearly 800 million US dollars).

Li Shitong, an analyst with Zhongke Securities Co., said the market falls were no surprise to him as both markets jumped about 2 percent on Monday, propelled by expectations for favorable policy announcement from the securities authorities.

It is only natural for the markets to readjust downward as no big favorable policies were announced on Monday as expected, said Li.

But he believed the market would turn for the better in the medium term as the Monday remarks by the top regulator indicated more certainty for the major structural reform of the country's stock market.

China's stock market is experiencing a downturn as China Securities Regulatory Commission (CSRC) is carrying out an experimental reform plan of selling non-tradable state-owned shares, which previously triggered market uncertainties among the investors.

Shang Fulin, chairman of the CSRC, said the reform would be carried out in full swing and be completed in a short term at a press conference held by the State Council Information Office on Monday afternoon.   

(Xinhua News Agency June 28, 2005)