1st LD-Writethru: China stocks retreat again

Chinese shares plunged back into negative territory on Thursday in a reversal of Wednesday's blip, as investors chose to take profits.

The benchmark Shanghai Composite Index shrank 2.2 percent to close at 3,705.77 points. The smaller Shenzhen Component Index fell 3.33 percent to close at 12,395.92 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 4.93 percent to end at 2,561.19 points.

The turnover of the two bourses came in at 1.1 trillion yuan (180 billion U.S. dollars).

Only 107 shares rose by more than 5 percent while 669 shares dropped by over 5 percent. Sectors related to finance, banking and Internet security were the biggest losers.

CITIC Securities' Gao Xiang said, "On one hand, the government is trying to stabilize the market and stop the sell-off, on the other, shareholders still lack confidence and are liquidating their positions," he said.

He predicted the stock index would yo-yo in the coming days before any meaningful rally.

To end the market rout that has wiped off one third of its value since mid-June, the government has reducing the number of IPOs, banned short-selling and introduced a six-month ban on big shareholders selling stocks. Endi