China stocks slip 1.3 pct, near chart support

China's main stock index fell on Tuesday because of concern about the weakness of the U.S. financial system, but it came off its lows after nearing major technical support.

The Shanghai Composite Index .SSEC ended the morning down 1.26 percent at 2,067.057 points, after hitting a one-month low of 2,037.024. Analysts see strong support around 2,000 points, which was resistance in late December and January.

Losing Shanghai A shares narrowly outnumbered gainers by 495 to 422. Turnover in Shanghai A shares rose to 43.2 billion yuan ($6.3 billion) from 36.7 billion yuan on Monday morning, but remained lower than its levels for most of the past month.

Financial, coal and non-ferrous metal shares led the declines, partly on worries that the turmoil in the United States could mean long-term weakness in demand for commodities.

Merchants Bank (600036.SS: Quote, Profile, Research) slipped 3.83 percent to 14.06 yuan after rising 2.45 percent on Monday. A total of 4.8 billion Merchants Bank shares became newly tradable on Monday when a final lock-up period for institutional investors expired.

Leading coal producer China Shenhua Energy (601088.SS: Quote, Profile, Research) sank 3.51 percent to 18.17 yuan, while Jiangxi Copper (600362.SS: Quote, Profile, Research) sagged 3.04 percent to 15.01 yuan.

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