Shanghai's composite index fell 21.05 points to 2,168.74.

Turnover totalled 7.3 billion yuan (US$880 million), down from 7.8 billion yuan (US$940 million) on Tuesday.

Shenzhen's shares fell 48.52 points to 4,638.58. Transaction volume stood at 5.8 billion yuan (US$700 million), compared to 6 billion yuan (US$720 million) in the previous session.

Hard-currency B shares lost ground yesterday, surrendering gains from a sharp rebound on Tuesday as bearish sentiment pushed the market back into a downward trend.

Most shipping, port and textile stocks, which had bucked market weakness in the morning on hopes that the firms would benefit from China's looming WTO membership, fell victim to the index slide in the afternoon.

The Shanghai B-share index fell 2.21 percent to 208.013 points as turnover dropped 24 percent to a paltry US$77.62 million.

The Shenzhen B-share index tumbled 4.06 percent to 331.28 on lower turnover of a tiny HK$335.59 million (US$43 million).

Shanghai B-share index rose 2.93 percent on Monday and Shenzhen's jumped 5.25 percent in a technical rebound following substantial falls over the past two weeks. But fragile sentiment still dogged the markets.

"Investors appear to be quite disappointed because the markets did not extend yesterday's rebound, so selling got heavier in afternoon trade," said analyst Ren Chengde of Galaxy Securities.

Brokers said while WTO membership would increase competition in many Chinese industries, rising foreign trade would boost transport firms and textiles would benefit from higher exports.

Textile counter Haixin Co, which topped the gainers list in the morning with a 2.62 per cent rise, ended down US$0.006 at US$1.214 as the index retreated.

But the A shares, off limits to foreign investors, were still among the best performers, climbing 3.67 percent to end at 15.55 yuan (US$1.87).

As the moment for the announcement of the result for China's 2008 Olympics bid nears, speculators are snapping up any stock with "Beijing" in its name in hopes of profiting from a massive host city spending boom.

If Beijing is chosen on Friday by the International Olympic Committee to host the games, it will need to build sports facilities, housing, roads, airport terminals, transit railways and telecom infrastructure and launch projects to reduce industrial pollution.

Property developer Beijing North Star Co Ltd appears ready to be swept up in the celebratory spirit, with Hong Kong media reporting that it plans to build the world's tallest building on land it controls in the area being pitched as Beijing's Olympic Village.

North Star acknowledges plans for an office tower on the site, but a company official declined to comment on its height.

North Star's stock has risen about 136 percent in the past year and is up 59 percent over the past three months, despite a fall of 4.65 percent on Wednesday to HK$2.05 (US$0.26).

The prospects of the Olympics in Beijing has also propelled shares of Shanghai-listed athletic equipment and venue operator China Sports Industry Co to a 43 percent gain in the past three months, far outstripping the Shanghai A-share index's 1.3 percent gain over the same period.

The Dow Jones China 88 Index declined 1.08 points to close at 173.40 yesterday.

The Dow Jones Shanghai Index dropped 2.02 points to end at 250.94.

The Dow Jones Shenzhen Index lost 1.94 points to finish at 246.38 yesterday.

(China Daily 07/12/2001)