At closing bell, the benchmark Shanghai Composite Index declined by 1.86%, or 63.79 points, to 3,356.78. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 1.76%, or 40.50 points, to 2,264.48. The blue-chip CSI300 index sank 1.63%, or 82.07 points, to 4,964.77.
The market grappled by risk-off environment after news that the E.U. was banning United Kingdom flights to Europe due to fears about a new strain of coronavirus, said to be up to 70% more transmissible than the original. A more-virulent strain of the coronavirus in Britain sparked fears of fresh disruptions and weighed on investors' expectations of a vaccine-led economic rebound.
Investors are worried that the mutation of the Covid-19 strain will make the situation more difficult to control. This has led to concerns that even with the roll-out of the coronavirus vaccines, it may take longer than expected for the economy to recover
Worries over President Donald Trump's sanctions on blacklisted companies, and concerns over China's antitrust laws have also continued to weigh on market sentiment.
Four companies that began trading on Tuesday posted substantial gains. In Shanghai, Forest Packaging Group, which manufactures paper packaging products, gained 44% to 27.32 yuan from its listing price of 18.97 yuan. Shanghai General Healthy Information, which develops medical automation and intelligence systems, added 44% to 20.45 yuan from its issue price of 14.20 yuan. In Shenzhen, network communications service provider Nova Technology rose 88.7% to 61.40 yuan from its IPO price of 32.54 yuan. Textile product manufacturer Shandong Nanshan Zhishang Sci-tech gained 254.1% to 17.60 yuan from its listing price of 4.97 yuan.
CURRENCY NEWS: China's yuan appreciated against the dollar as the central bank set a firmer midpoint. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.5387 per dollar, 120 pips or 0.18% firmer than the previous day fix of 6.5507. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.5519, firmer by 18 pips than the previous late-session close.
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