Chinese shares fall 0.74 percent by midday

Chinese share prices slipped 0.74 percent by midday Thursday as a sell-off on Wall Street overnight and profit-taking on large-caps dragged the market down, dealers said.

They said investors were cautious after the Dow Jones Industrial Average slumped more than two percent on earnings jitters, while banks and property developers retreated on profit-taking after rising for three consecutive days.

"The market will likely drop further as upward momentum has been waning," Shenyin Wanguo Securities' Qian Qimin told Dow Jones Newswires.

The benchmark Shanghai Composite Index, which covers both A and B shares, shed 21.61 points to end the morning 0.74 percent lower at 2,898.94.

But textile companies bucked the trend, turning sharply higher amid market talk that China will raise the export tax rebate for textile products as early as July.

The Shanghai A-share index was down 22.76 points, or 0.74 percent, to 3,040.81 points, while the Shenzhen A-share index was down 5.74 points, or 0.62 percent, to 922.49.

(Agencies)