Chinese shares gave up morning gains to close 0.18 percent lower on Wednesday, as funds sold large-capitalisation stocks such as Yangtze Electric Power Co Ltd to lock in profits. The benchmark Shanghai composite index stood at 1,108.153 points, following a 0.07 percent climb in the morning.

Yangtze Power, joint operator of the Three Gorges Dam, shed 1.68 percent to 7.03 yuan.

China United Telecommunications Corp Ltd, the smaller of the country's two mobile carriers, fell 1.15 percent to 2.59 yuan.

Bucking the trend, drug maker Shanghai Pharmaceutical Co Ltd surged 3.54 percent to close at 4.39 yuan after local media reported that its parent, Shanghai Pharmaceutical (Group) Co, had gained approval to make to make anti-viral medicine for the Chinese Ministry of Health.

China's benchmark index, lifted by the yuan revaluation in July, is still down about 13 percent this year.

"The index could fall further this week, with no market-boosting policies in sight," said an analyst with Huatai Securities.

Copyright Reuters, 2005