Stocks fall, curb news hits developers

Broad drops in the heavily weighted real estate and securities sectors pulled stock markets in Shanghai and Shenzhen into loss territory Tuesday.

The Shanghai Composite Index declined 31.38 points, or 1.51 percent, to close at 2,047.89; while the Shenzhen Component Index slumped 1.87 percent, or 157.30 points, to finish at 8,234.60.

Both indices opened below their previous close and descended throughout morning trading as listed property developers and brokerages stepped down. The markets continued to lose steam in the afternoon after being further depressed by drops in shale gas, geothermal energy, aviation manufacturing and gold shares.

Stocks exposed to China's real estate market weakened after the Xinhua News Agency, citing the head of the Ministry of Housing and Urban-Rural Development, reported that the government would not modify its curbs on home purchases in the near future and was doing research on how to expand the country's pilot property tax program. Huayuan Property Co, Shunfa Hengye Corp and Zhongzhu Holding Co all plummeted to the daily limit to close at 3.40 yuan ($0.55), 5.38 yuan and 8.21 yuan respectively.

On the winning side, the government's pledge to promote environmentalism with its "Beautiful China" initiative carried environmental protection stocks higher for a second day. Guangxi Fenglin Wood Industry Group Co surged to the daily limit to finish at 5.19 yuan.

With little on the immediate horizon to offer investors guidance, analysts advised caution in the coming days.