The benchmark Shanghai Composite Index fell 95.76 points, or 2.3 percent, to end at 4,070.12, the lowest since July 23. It opened 2.13 percent higher, following an overnight rally on Wall Street. The Shenzhen Composite Index tumbled 467.26 points, or 3.15 percent, to 14,348.46.
Losses outnumbered gains by 731 to 104 in Shanghai and by 566 to 93 in Shenzhen. Aggregate turnover expanded to 126.95 billion yuan (17.9 billion U.S. dollars) from 116.52 billion yuan on Tuesday.
Overnight, the Dow Jones Industrial Average rose 416.66 points, or 3.55 percent, to 12,156.81 on news that the U.S. Federal Reserve would inject 200 billion U.S. dollars into the strained credit market in a coordinated effort with other central banks.
Other regional markets rallied after the Fed's move. Tokyo's Nikkei 225 Index rose 1.6 percent to 12,861.13 and Hong Kong's Hang Seng Index climbed 1.86 percent to 23,422.76.
Lin Weiwen, an analyst at Chinalion Securities, said that the rally on Wall Street and other regional markets failed to boost the sentiment of Chinese inventors, who believed that the government would take further tightening steps, including interest rate hikes, to ease inflationary pressures.
Consumer prices rose 8.7 percent in February year-on-year, which was almost a 12-year high and also higher than the 7.1 percent recorded in January, the National Bureau of Statistics said Tuesday.
Financial and property stocks fell the most as investors sold on the belief that these would be hardest-hit by further tightening measures. Industrial Bank plunged 6.92 percent to 35.08yuan and Shanghai Pudong Development Bank lost 6.06 percent to 33.30 yuan. Industrial and Commercial Bank of China, the country's largest, slumped 1.94 percent to 6.05 yuan.
Major property developers China Vanke slid 4.03 percent to 21.21 yuan and Gemdale Corp. sank 6.94 percent to 33.26 yuan.
Coal and new energy stocks cushioned the slump, with high global crude oil prices expected to boost demand for alternative coal and new energies, including wind and solar power.
China Shenhua Energy, the country's largest coal producer, edged up 0.06 percent to 50.06 yuan. China Coal Energy, the second-largest, rose 0.98 percent to 19.57 yuan. Lanzhou Greatwall Electrician Co., a wind power equipment maker, added 2.13 percent to 16.28 yuan.
Source: By Government of China
