Shanghai's B-share index nudged down 0.75 percent to 123.744 points while Shenzhen's edged down 0.67 percent to 211.37.

Hard-currency B shares are available to Chinese and foreign investors.

"Punters unloaded loss-makers to avoid getting trapped," said analyst Zhang Qi of Haitong Securities.

Motorcycle maker Ji'nan Qingqi was the biggest decliner among Shanghai B shares, falling 4.96 percent to 32.6 US cents. The company warned investors of a possible delisting after a heavy loss for last year, partly due to provisions for debts, after losing money in 2000 and 2001.

Car stocks extended their recent rally as punters continued to bet on the industry's rapid growth. The Chang'an Automobile Co, China's biggest minivan maker, topped the B-share gainers' list in Shenzhen with a rise of 3.41 percent to HK$4.85 (62 US cents).

It has surged nearly 70 percent since late October 2002 and plans to post 2002 results on Thursday.

The FAW Car Co, a listed unit of Chinese auto giant First Automotive Works, was the best A-share performer in Shenzhen, forging 6.85 percent higher to 8.58 yuan (US$1.01).

The benchmark Shanghai composite index, which groups B shares and yuan-dominated A shares, inched down 5.996 points or 0.39 percent to 1,515.132 points. Shenzhen's sub-index also dropped 14.70 points or 0.47 percent to end at 3,140.14 points.

The market has wavered mostly in a tight range in recent sessions, gaining 4 percent over the past three weeks, although the war in Iraq and the earnings season kept trade subdued.

Analysts said investors had favored drug firms of late as they believed a recent global outbreak of severe acute respiratory syndrome (SARS) would help their bottom lines.

"Increasing consumption of flu drugs in many cities around China may bring handsome profits to domestic drugmakers," said analyst Zhou Fengwu of Orient Securities.

The Biocause Pharmaceutical Co, based in Central China's Hubei Province, was the second-biggest A-share gainer in Shenzhen, with a rise of 6.41 percent to 12.11 yuan (US$1.42).

Shanghai's A-share index fell 0.39 percent to 1,584.360 points, while its Shenzhen counterpart edged down 0.77 percent to 445.59 points.

(China Daily April 8, 2003)