SHANGHAI stocks closed slightly lower in the morning session after two days of growth as the loss in small caps more than offset the gains of metal producers and banks.

The benchmark Shanghai Composite Index dipped 0.31 percent, or 7.42 points, to close at 2413.7. Turnover was 27.7 billion yuan (US$ 4.1 billion), slightly lower than yesterday's 28.4 billion yuan.

The Shenzhen Composite Index, which covers the smaller mainland exchange, dipped 0.4 percent to 954.57 points.

Metal producers led the gainers on recovery of the metal prices. Jiangxi Copper Co climbed 6.28 percent to 24.55 yuan. Yunnan Copper Co advanced 5.27 percent to 17.97 yuan. Aluminum Corp of China went up 1.93 percent to 9.00 yuan.

Property developers picked up after Poly Real Estate (Group) Co said that its first-half sales in terms of area rose 5.81 percent from a year earlier. Its stock went up 0.64 percent to 10.98 yuan. China Vanke rose 0.71 percent to 7.10 yuan. Gemdale Real Estate Corp added 1.6 percent to 6.40 yuan.

Most banks gained. China Merchants Bank edged up 0.53 percent to 13.22 yuan after the bank predicted a 50 percent increase of net income in the first half. Shanghai Pudong Development Bank rose 0.44 percent to 13.82 yuan. Industrial and Commercial Bank of China was unchanged at 4.12 yuan after announcing its plan to raise US$ 6.6 billion yuan through an rights offer by the end of this year.

Small-capitalized firms retreated. China National Software and Service Company fell 2.76 percent to 20.10 yuan. Tibet Rhodiola Pharmaceutical Holding Co went down 1.76 percent to 10.60 yuan. Hainan Expressway Co dropped 3.7 percent to 5.99 yuan. Shanghai Wangsu Science and Technology Co lost 4 percent to 17.46 yuan.