BEIJING -- Chinese equities fell more than 3.6 percent on Thursday, wiping out almost half of Wednesday's surge, as investors took profits amid an absence of news about an anticipated government stimulus plan.
The benchmark Shanghai Composite Index fell 3.63 percent, or 91.57 points, to close at 2,431.72. In Shenzhen, the market dropped 3.38 percent, or 288.12 points, to close at 8,243.03.
The Shanghai index rose 7.63 percent on Wednesday, its largest one-day gain in four months, on talk that the government would channel hundreds of billions of yuan into an economic and market stimulus package.
Aggregate turnover edged up to 68.4 billion yuan ($9.99 billion), from Wednesday's 65.7 billion yuan.
Losses outnumbered gains by 678-137 in Shanghai and 604-76 in Shenzhen.
The market opened lower after the government failed to confirm the talk of stimulus measures, leading investors to take profits.
Sentiment wouldn't turn decisively for the better until the authorities came up with concrete market-boosting measures, instead of merely making positive but vague statements, said Xu Xiaoming, senior analyst at Shenglong Securities.
The Shanghai-based National Business Daily on Thursday quoted government think tank economists as expressing doubt that there was any such stimulus plan. The idea of the plan was raised earlier this week by JPMorgan Chase.
The only bright spot was brokerage shares, which gained for a second day, as the national securities regulator confirmed on Thursday that talks were in progress to decide how brokers could help bring large volumes of freed-up non-tradable shares onto the market.
Hongyuan Securities was up 6.75 percent to 13.12 yuan and Changjiang Securities up 6.08 percent to 13.95 yuan.
Steel shares lost amid concerns over declining domestic steel prices and weakening market demand.
Crude steel output in the first seven months reached 308.3 million tonnes, up 9.33 percent year-on-year. But the growth rate was 9.14 percentage points lower than a year earlier, the China Iron and Steel Association reported on Tuesday.
Baosteel was down 5.05 percent to close at 6.95 yuan and Tangsteel dropped 5.47 percent to 4.67 yuan.
Power generators declined on profit-taking.
Shares of Shanghai Electric Power shed 6.25 percent to 4.05 yuan while Huaneng Power International and Guodian both slumped by the 10 percent daily limit to 6.75 yuan and 5.31 yuan, respectively.
The government lifted the on-grid price of coal-fired electricity by 0.02 yuan, effective Wednesday. However, power plants said this was far from enough to cover losses.
To cover losses, the price had to be raised by at least 0.08 yuan, said a Shanghai Electric Power official. The company lost 560 million yuan in the first half due to higher coal prices.
Oil companies and airlines plummeted after an overnight rebound in world crude oil prices, as investors worried higher costs would erode their earnings. Domestic oil companies and refiners import much of the crude they process, and while they must pay world prices to do so, their domestic product prices are subject to government ceilings.
PetroChina, the country's largest oil producer, declined 3.72 percent to 13.7 yuan while Sinopec, Asia's top oil refiner, lost 6.56 percent to 10.12 yuan.
Airline shares fell across the board after the International Air Transport Association said a global airline industry downturn was starting to affect China's airlines.
Air China dropped 5.13 percent to 6.29 yuan, China Southern Airlines fell 4.01 percent to 5.51 yuan and China Eastern Airlines lost 2.54 percent to 5.37 yuan.
