Chinese shares closed lower on Wednesday, dragged down by weak property and banking sectors.

The benchmark Shanghai Composite Index went down 0.17 percent, or 3.46 points, to finish at 2,021.73. The Shenzhen Component Index lost 1.70 percent, or 123.83 points, to close at 7,150.12.

Combined turnover on the two bourses shrank to 192.68 billion yuan (31.4 billion U.S. dollars) from 201.98 billion yuan the previous trading day.

The property sector was weak over concerns about the default risk for Zhejiang Xingrun Real Estate Co., a small developer that was reportedly unable to pay 3.5 billion yuan in debt, including 2.4 billion yuan in loans from 19 commercial banks.

The People's Bank of China, the country's central bank, has denied holding bailout talks with the small property developer.

Poly Real Estate Group lost 1.60 percent and China Vanke dropped 1.32 percent. Thaihot Group plunged 6.73 percent.

The banking sector was also hurt, with China Minsheng Bank down 2.03 percent, Ping An Bank down 1.35 percent and Bank of Communications down 0.27 percent.

Bucking the trend, shares related to chemical fiber and cement gained, with sub-indices tracking the two sectors up 3.62 percent and 1.48 percent respectively.

The ChiNext Index, a NASDAQ-style board tracking China's growth enterprises, lost 1.31 percent, or 19.42 points, to end at 1,466.22 points on Wednesday.