The benchmark index opened 77.83 points lower from 3,863.25, to lose the 3,900-point stand. After a short slide, it turned up a little but then dived to 3,818.85. After hitting the lowest point for the morning, it edged up to the highest at 3,968.19, before riding down again to close 1.96 percent lower than yesterday's closing.

The Shenzhen Component Index, opened 240 points lower from 12,877.35, 239.91 and closed at 12,828.77, down 280.48 points or 2.14 percent.

Of the A shares listed on the two stock exchanges, 348 moved up while 947 closed down and 157 remained unchanged.

On its first trading day today, China COSCO, the logistics and shipment conglomerate, ranked on top of the gainers list with the largest trading volume and transaction value. Its share price rocked 93.87 percent to 16.44 yuan by the break.

Stocks in the information technology, finance and transportation sectors performed better than the others this morning. Tsinghua Unisplendour and Shenzhen Changcheng Kaifa Technology led computer makers and service providers to pioneer the IT industry.

B shares rose against the trend. Of the 109 listed B shares, 68 went up, 10 ended flat and three fell. Mutual funds ended mixed, with the Shanghai index up while the Shenzhen one down.

The plunges in the last two trading days have eliminated 1.408 trillion yuan off from the stock market. The market value of all securities in the two exchanges stood at 17 trillion yuan, down 7.7 percent from that of last Thursday, before the Shanghai Composite Index suffered a 280-point loss in merely two trading days.

Yesterday, there were over 500 stocks sealed at the maximum proportion of price slump of 10 percent and prices of 1,000 shares closed lower than the lowest prices following May 29, when the stamp tax rate was raised to 0.3 percent overnight.

Although there wasn't further tightening measure over the weekend, analysts believe the turbulence was the aftermath of multiple depressive pressures from last week. The depressive factors include the capital outflow prospect, with COSCO to be traded on the secondary market today, the approval of Bank of Nanjing and Bank of Ningbo for their initial public offerings; the incoming red chip return wave; the anticipated interest rate hike and expectation on interest tax slash.

Speculation is growing that the government plans to reduce or remove the tax on interest income. The 28th session of the Standing Committee of the National People's Congress (NPC), which has been in meetings since Sunday, may vote on a proposal authorizing the State Council to adjust or remove the tax on interest income, which could prompt investors to stockpile their money in bank savings accounts rather than buy stocks.

The vote is likely to take place on Friday, the last day of meetings, according to sources close to the NPC and the central government.

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