SHANGHAI'S key stock index fell for a fourth day yesterday on concerns the interest rate cut would not be enough to boost the weak economic outlook amid the global financial crisis.

The market showed some life in the morning session with a 0.56-percent gain after China's central bank cut the interest rate by 0.27 percentage points, but stocks fell back later.

"The index depends more on economic responses than news of favorable measures," said Zhang Fan, of Changjiang Securities. "The economic downturn is clear and investors are worried."

The Shanghai Composite Index closed down 0.84 percent, or 17.64 points, at 2,074.58, after reaching a low of 2,063.41.

Losers outnumbered gainers 622 to 204, while 41 remained unchanged.

Turnover in the local market shrank to 37.16 billion yuan (US$5.44 billion), compared with 42.02 billion yuan a day earlier.

"The interest rate cut could not bring economic growth back to a fast track and further loosening of fiscal policy and monetary policy is required," Haitong Securities Co said in a note.

Developers fell on concerns the interest rate cut would not be enough to encourage home buyers.

Gemdale Corp was down 6.85 percent to 5.98 yuan, while Poly Real Estate Group Co declined 6.30 percent to 14.13 yuan.

Heavily weighted blue chips dragged the index down yesterday. The Bank of Communications dipped 1.71 percent to close at 5.16 yuan. China Merchants Bank lost 0.49 percent to close at 14.22 yuan, while the Industrial and Commercial Bank of China dropped 0.98 percent to 4.03 yuan.