Chinese equities fell for the second consecutive day to close at 3356.33 points, 72.17 points or 2.11 percent lower, on Thursday, led by weakening coal, steel and financial stocks.
The benchmark Shanghai Composite Index down 2.11 percent, or 72.17 points, to finish at 3,356.33. The Shenzhen Component Index slide 2.08 percent, or 286.97 points, to end at 13,495.97.
Combined turnover shrank to 329.2 billion yuan ($48.16 billion) from 361.18 billion yuan on the previous trading day.
The People's Bank of China said on late Wednesday it would "fine-tune" its monetary policies, which sparked investors' concerns that credit would be tightened, said market dealers.
It also said in a quarterly report issued Wednesday that it would use market tools to guide appropriate lending growth during the second half of this year.
Chinese banks issued a record 7.37 trillion yuan in new loans during the first half of the year, exceeding the full-year target of 5 trillion yuan.
"Although increasing loans has helped to boost China's economy, worries about bubbles in the country's equities market also rose," said Lin Songli, an analyst with Guosen Securities.
Financial shares led the drop, with Guoyuan Securities dipping 4.20 percent to 24.87 yuan and the Northeast Securities dropping 3.88 percent to close at 54.51 yuan.
Coal shares also weakened. Datong Coal mine dipped 4.19 percent to close at 45.73 yuan. China Shenhua shed 4.20 percent to 38.52 yuan.
