Stocks in companies that warned of weak performances in 2004 populated Monday's list of decliners, including three that issued statements on Monday forecasting losses.
Trading company Beiya Industrial, textile firm Matsuoka and agricultural producer-to-IT developer Jinli Technology plummeted their 10 percent daily limits to 2.49, 3.94 and 4.41 yuan, respectively.
"Investors dumped poor earners to ward off risks ahead of the Lunar New Year break," said CITIC Securities analyst Wu Ang.
Markets would be closed from February 7 to February 15 for the important annual holiday, and listed firms would then head into their peak 2004 corporate reporting season.
The key index has fallen 6 percent since the start of 2005 after a 15 percent dive that made it Asia's worst performer in 2004, hit by Beijing's economic-cooling steps, corporate scandals and fears of a long queue of stock sales.
In the latest, Hong Kong-listed Huadian Power, China's third-largest electricity producer, would list shares issued via a $233 million domestic IPO in Shanghai on Thursday.
"Investors are cautious ahead of Huadian's debut, and that helped the market accelerate falls today," said analyst Ren Chengde at Galaxy Securities.
Despite overall weakness on the market, bargain-hunting emerged among some index heavyweights.
Yangtze Power, China's most valuable generator and operator and the Three Gorges Dam, climbed 0.4 percent to 8.53 yuan after it forecast its 2004 earnings should almost double to more than $330 million, helped mainly by capacity expansion.
Wuhan Iron and Steel, China's third-largest maker of the metal, jumped 1.9 percent to 4.2 yuan after it said last week its 2004 net profit was likely to more than quintuple following a similar acquisition of assets from its parent.