Chinese shares slump 3.03 percent in morning trade

Chinese share prices ended Tuesday morning trade down 3.03 percent as investors dumped shares in panic selling and shrugged off the latest official rescue measures, dealers said.

The benchmark Shanghai Composite Index closed down 3.03 percent at 3,022.49 at 11:30am, after tumbling as low as 3,007.87. Losers outnumbered gainers 849 to 55 while 14 counters remained unchanged.

Dealers said negative reasons behind the slump over the past six months, included tight monetary measures, inflation fears, and a slowdown in corporate earnings.

The securities regulator sent out a signal of support for the market on Sunday by placing curbs on the sale of non-tradable shares, once they exit lock-up periods.

The ruling triggered a surge on Monday morning, but gains failed to last.

Dealers said more market-friendly policies would be required to restore investor confidence with some lasting effects.

"Investors need some time to digest the new policy as their confidence has been shattered by recent falls," said Wei Daoke, an analyst at SYWG Securities.

"The key index is likely to tumble around the 3,000 level for weeks, and the future trend remains uncertain."

The Shanghai A-share index lost 99.34 points or 3.04 percent to 3,171.43 points, while the Shenzhen A-share index was down 37.06 points or 3.84 percent to 929.10.

Non-ferrous metals stocks led the decline in the morning due to an expected slowdown in demand.

"Nonferrous metal stocks were hit hard as a slowing global economy indicated a shrinking demand for metal products," said Wu Feng, analyst at TX Investment Consulting.

"The weak performance of metals prices on commodity markets also pressured the stocks."

(Agencies)