BEIJING, July 28 (Xinhua) -- Chinese stocks closed lower on Wednesday, with the benchmark Shanghai Composite Index down 0.58 percent, at 3,361.59 points, easing from a sharp drop of 2.49 percent on Tuesday.
The Shenzhen Component Index closed 0.05 percent lower at 14,086.42 points, recovering from Tuesday's loss of 3.67 percent.
The combined turnover of stocks covered by the two indices came in at 1.27 trillion yuan (about 195.6 billion U.S. dollars), down from 1.53 trillion yuan on the previous trading day.
The sharp drop is unsustainable and the index will gradually stabilize, Guotai Junan Securities said in a report, noting that the decline of the market earlier was mainly affected by short-term factors, and the medium-term positive trend of the market remains unchanged.
The macro liquidity remains loose, with the reserve requirement ratio cut earlier this month leading to a stable market expectation of macro liquidity easing, said Qin Peijing, chief analyst of CITIC Securities, in a research note.
Qin added that the driving forces and bright spots of the Chinese economy in the second half of the year still exist, and the trend of stable and positive fundamentals also remains unchanged.
The ChiNext Index, tracking China's NASDAQ-style board of growth enterprises, gained 1.61 percent to close at 3,284.92 points Wednesday.