SHANGHAI shares tumbled more than 2 percent yesterday, led by heavyweights as investors cashed in after Monday's gain.

The key Shanghai Composite Index lost 2.71 percent, or 56.25 points, to 2,017.32. Turnover rose to 53.3 billion yuan (US$7.8 billion) from 41.9 billion yuan on Monday.

Losers outnumbered gainers 749 to 115 and 44 stocks remained unchanged.

The index surged in morning trading yesterday, following United States stocks which soared more than 11 percent on Monday, but it dived in the afternoon session on uncertainties of an economic slowdown.

Although stocks surged on Monday, the long-term economic situation is still pessimistic, said Gu Jie, an analyst at Chinalion Securities Co.

Banking shares reversed Monday's gains, with the Industrial and Commercial Bank of China losing 3.26 percent to 4.16 yuan, the Bank of China lost 3.31 percent to 3.21 yuan, the Bank of Communications shed 1.12 percent to 5.29 yuan. The Shanghai Pudong Development Bank Co, which predicted a 150-percent increase in profit in its first three quarters, still lost 1.48 percent to 13.33 yuan.

Brokerages were also among the losers, with Haitong Securities Co plunging 10 percent to 19.91 yuan while Pacific Securities Co lost 9.28 percent to 17.79 yuan. Insurance companies are also facing a critical moment as their profits are likely to be further eclipsed, Everbright Securities said in a report. China Pacific Insurance (Group) Co sank 5.97 percent to 13.54 yuan and China Life Insurance Co Ltd retreated 3.3 percent to 21.08 yuan.

Bright Dairy & Food Co Ltd and Inner Mongolia Yili Industrial Group Co surged 10 percent after they denied reports the dairy industry was losing over 200 million yuan in the milk powder scandal.