BEIJING - Chinese shares saw a bearish run on the first trading day of the lunar Year of the Sheep with tumbles sweeping financial companies hurt by lackluster business performance.

The benchmark Shanghai Composite Index dropped 0.56 percent to finish at 3,228.84 points, while the Shenzhen Component Index retreated 1.53 percent to close at 11,539.7 points.

The Hushen 300 Index, which samples about a fifth of the total stocks listed on the two bourses, dipped 1.24 percent to close at 3,478.73 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 0.93 percent to end at 1,876.74 points.

The financial sector led Wednesday's decline with a 2.55 percent decrease, followed by the ceramic product sector and electronic device sector.

"Financial reports showed that many lenders, including China Minsheng Bank and China Merchants Bank, faced low profit rates and high non-performing loan ratios in the fourth quarter last year," said Chen Wei, an analyst with CITIC Securities.

The Hong Kong Exchanges and Clearing Ltd will allow overseas investors to short sell A-shares under the Shanghai-Hong Kong Stock Connect program starting from March 2. In Chen's view, the decision had also fueled market pessimism.

"In the near future, the equity market will likely continue to fall," predicted the analyst.