Chinese shares drop on liquidity concerns
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Chinese stocks dropped Tuesday as the suspension of central bank cash injections raised investor concerns over market liquidity.

The benchmark Shanghai Composite Index closed 0.41 percent lower at 3,182.8 points, while the Shenzhen Component Index closed 0.57 percent lower at 10,474.83 points.

Combined transaction volume on the two bourses expanded slightly to 383.9 billion yuan (about 56.5 billion U.S. dollars) from 369.8 billion yuan Monday.

The ChiNext Index, China's NASDAQ-style board, was down 0.35 percent to 1,829.51 points.

The retreat came as China's central bank skipped open market operations for the eighth trading day in a row Tuesday, resulting in no cash injections in the banking system.

Though a mid-year crunch on the money market has been averted, liquidity is likely to be tightened again if the central bank continues to suspend open market operations in the first half of July, according to an analysis note from Shaanxi Jufeng Investment Information.

Heavyweight stocks fell markedly Tuesday. The Hushen 300 index, which is mainly composed of large cap shares, fell 0.66 percent.

Liquor and home appliance makers lost the most. Kweichow Moutai slipped 1.84 percent to 451.92 yuan, while Gree Electric Appliances shed 1.53 percent to 39.87 yuan.

Author： 　　　Source：xinhua　　　 Editor：Yang Fan