Shanghai shares drop 1.29% after volatile trading

China’s A-share markets continued to extend losses on Tuesday, with most sectors falling on the day.

The benchmark Shanghai Composite Index tumbled 1.29 percent to close at 3,274.3 points amid strong risk aversion sentiment, despite a rally in consumer stocks in early trading.

The smaller Shenzhen Component Index plunged 0.96 percent to finish at 13,023.43 points, while the ChiNext Index dropped 0.53 percent to 2,555.54 points.

Volume on the two main bourses was 702.3 billion yuan (US$103.4 billion), compared with 755 billion yuan in the previous session.

The losses were broad-based, with non-ferrous metals, transportation and the national defense industry leading the day's declines.

Only the pharmaceutical and biological sectors closed up slightly.

Shen Meng, executive director of Chanson Capital, told Caixin.com that shares in major European countries took a hit on Monday as coronavirus concerns returned and continuous political disputes in the United States have also depressed the market's expectation of its economic recovery.

For A-shares, he adds, the influence of external markets is limited, but the overall basic business performance of A-share listed firms is tending to weaken.