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1st Ld-Writethru: Chinese shares close slightly lower after deep dive, led by heavyweights

Xinhua, January 5, 2016 Adjust font size:

The stock markets managed to end the day with just a slight loss after a heavy plunge in the afternoon session on Tuesday.

The benchmark Shanghai Composite Index lost 0.26 percent to close at 3287.71 points. The smaller Shenzhen index lost 1.36 percent to close at 11,468.06 points.

The ChiNext Index, the NASDAQ-style board of growth enterprises, dropped 2.99 percent to close at 2,416.73 points.

Total turnover on the two bourses increased, standing at 811.5 billion yuan (124.52 billion U.S. dollars).

Stocks dived 3 percent at opening before the heavyweights led both indexes into positive territory. The Shanghai index plunged to about 3,191 points after the lunch break and soon rebounded before finally landing on 3,287.71 points at closing.

The sub-indexes related to ship-building, iron and steel, and financial firms were among the few to gain, contributing a lot to the rebound of the index in the afternoon session.

The textile industry was the most battered sector of the day, which declined by 4.86 percent. Jingwei Textile Machinery Co. Ltd. continued its downtrend by losing 7.47 points to end at 25.03 yuan at closing.

A total of 50 stocks declined by the daily limit of 10 percent.

Investors have not completely shaken off the panic provoked by Monday's heavy losses, as trading was halted after shares tumbled 7 percent, triggering the new "circuit breaker" mechanism on the first trading day of 2016.

The imminent deadline of a six-month ban on share sales, which was imposed on listed companies' major shareholders during the stock market rout this summer, also added to a downbeat expectation for the investors.

Before the markets opened, the China Securities Regulatory Commission (CSRC) promised it would soon roll out new measures to better standardize stock selling by major shareholders to restrict massive selloffs and encourage holdings reduction through other means, such as block trading and equity agreement transfer.

The move aims to phase out transient market-supportive measures and avoid sudden impact on the stock markets due to major holders' selling, the CSRC said. Endi