Chinese shares closed down 1.54 percent on Thursday, with metal and steel makers hit by continued profit taking, dealers said.
The Shanghai Composite Index, which covers A and B shares, shed 40.79 points to 2,610.62 on turnover of 138.8 billion yuan (20.3 billion dollars).
Blue chips lost steam as investors' hopes for a fast economic recovery faded while growing number believe stocks are now overpriced due to speculation surrounding government stimulus policies, traders said.
Shanghai shares have risen more than 43 percent since the beginning of the year, but analysts have said the gains are not supported by economic fundamentals.
"There are hardly any fresh positive leads from the government now, as they have launched too many measures," Zhang Gang, an analyst at Central China Securities, told Dow Jones Newswires.
Falls in the United States overnight also weighed on sentiment, dealers said.
Maanshan Iron and Steel fell 2.1 percent to 4.13, while Wuhan Iron and Steel ended 2.1 percent lower at 7.07 yuan. Aluminum Corp of China dropped 2.5 percent to 10.7 yuan.
Auto makers and coal producers also retreated on profit-taking.
Chongqing Changan Automobile shed 4.5 percent to 8.69 yuan, while FAW Car dropped 4.7 percent to 15.61 yuan.
China Shenhua Energy tumbled 5.0 percent to 26.64 yuan, while Yanzhou Coal Mining retreated 4.9 percent to 15.39 yuan.
Oil producers were the only bright spot in the weak market as rising crude prices fuelled hopes of a hike in product prices.
PetroChina rose 0.8 percent to 13.17 yuan, and China Oilfield Services added 0.6 percent to 16.41 yuan.
The Shanghai A-share index lost 42.84 points, or 1.54 percent, to close at 2,740.14 on turnover of 138.4 billion yuan, while the Shenzhen A-share index was down 20.42 points, or 2.16 percent, at 923.82 on turnover of 70.9 billion yuan.
The yuan closed the day at 6.8247 against the dollar, up from Wednesday's finish of 6.8250.
The Shanghai B-share index shed 2.35 points, or 1.34 percent, to 173.18, while the Shenzhen B-share index lost 5.30 points, or 1.29 percent, to 405.46.
