Shanghai's key stock index fell from a two-week high in the morning session today as most blue chips were shunned by investors.

The Shanghai Composite Index lost 0.74 percent, or 21.60 points, to 2,898.94 at 11:30am.

Losers in the Shanghai market outnumbered gainers 555 to 244 while 21 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 0.61 percent, or 5.42 points, to 879.59.

Air China Ltd, China's largest international carrier, was among airlines that dived in the early session today.

Air China retreated 3.75 percent to 10 yuan (US$1.46) while China Southern Airlines, the country's biggest carrier by fleet size, lost 3.06 percent to 7.93 yuan.

Air China said it won approval from the nation's securities regulator to issue as many as 400 million A shares on the mainland stock market.