China's benchmark share index dipped below a crucial support level on Wednesday, depressed by heavy losses in companies that had joined an unpopular programme to float non-traded state shares, including Minsheng Banking Corp.
The Shanghai composite index finished 2.2 percent lower at 1,097.161 points, just below the pivotal 1,100 level, as Minsheng Bank resumed trade after a lengthy hiatus. Its shares, both the biggest decliners and most actively traded on Wednesday, dived 27 percent to end at 3.49 yuan. They had been suspended since September 30 while the bank hammered out details of its share float.
"Market sentiment is extremely weak due in part to continuous falls in companies related to the state share reform," said analyst Cao Xuefeng at West China Securities.
Analysts expect the benchmark index to keep sliding the near term, with the next support seen at 1,050.
China in April revived a programme to convert $250 billion of non-traded shares, which account for two-thirds of market capitalisation, into freely floated paper.