In a by now familiar pattern, investors once again preferred to take some profit rather than push the struggling market ahead, especially in the absence of any fresh news lead on the policy front.
The market has continued to struggle in 2005, with the Shanghai bourse down 8.21 percent and Shenzhen off 11.75 percent as investors once again showed no sign of any long-term commitment despite repeated government reassurances the markets have an important role to play in China's development.
The Shanghai A-share Index fell 9.42 points to 1,220.93 on turnover of 10.13 billion yuan (1.25 billion dollars) while the Shenzhen A-share Index lost 3.30 points or 1.12 percent to 290.06 on turnover of 5.63 billion yuan.
The benchmark Shanghai Composite Index, which covers both A- and B-shares, lost 8.81 points or 0.75 percent at 1,161.06 on turnover of 10.20 billion yuan.
The Chinese yuan closed at 8.0702 to the US dollar, up from previous finish at 8.0709.
"The market was weighed down by profit-taking in sectors such as power and telecoms, and it's a good thing to have the correction after recent gains, as the consolidation can help the indices move higher later," said Wang Mingzhi, an analyst at GF Securities.
The Shanghai Securities News reported earlier this month that China's Hua An Fund Management is likely to win QDII status early next year, making it the first firm to get such approval. Among the energy stocks, Huaneng Power International fell 0.37 yuan or 6.06 percent to 5.74 while Leshan Electric Power lost 0.12 or 3.23 percent to 3.60.
Sichuan Huiyuan Optical Communications fell 0.07 yuan or 2.64 percent to 2.58 and Nanjing Panda Electronics slipped 0.11 or 2.16 percent to 4.98.
Blue chips outperformed on continued portfolio window-dressing by institutional investors on the last trading day of 2005.