SHANGHAI'S stocks fell for a third straight day, led by coal firms and steel mills, in a weak market that's looking for badly needed incentives.

The benchmark Shanghai Composite Index, which tracks yuan-denominated A shares and hard currency B shares, dipped 0.54 percent to end at 3,351.65. The index hit an intraday high of 3,376.34 and an intraday low of 3,326.54.

Losers outnumbered gainers 499 to 284 while 70 were unchanged. Transactions totaled 53.3 billion yuan (US$7.67 billion), against 59.2 billion yuan on Wednesday.

"The market has not received any real incentives since the end of April. The lack of incentives deprived the market of support to boost investor confidence, which is quite weak at the moment," said Deng Zhimin, an analyst at Northeast Securities Co.

"If it were not for a rebound in the brokerage sector, the decline would have been worse. But the rebound was not strong enough to bolster the whole market."

CITIC Securities Co, China's largest brokerage, rose 3.08 percent to 34.15 yuan while Haitong Securities Co jumped 6.17 percent to 25.46 yuan. Hong Yuan Securities Co gained 2.62 percent to 25.08 yuan.

Losers included China Shenhua Energy Co Ltd, the nation's biggest coal firm, lost 6.15 percent to 42.87 yuan. Shanxi Xishan Coal & Electricity Power Co sank 3.59 percent to 52.14 yuan. Baoshan Iron & Steel Co slid 3.43 percent to 11.54 yuan.