China B-shares finished the morning session lower in light trading with many investors keeping to the sidelines, dealers said.

Airlines fell despite a third day of declines in crude oil prices.

The Shanghai B-share Index lost 1.51 points or 0.76 pct to 198.15, while the Shenzhen B-share Index fell 2.42 points or 0.56 pct to 428.70.

"Large caps were hit due to a lack of sufficient capital flowing into the market," said a Shanghai-based analyst who asked not be identified.

"Today's turnover is likely to shrink further," the analyst noted, adding that a major breakthrough on the composite index during the Beijing Olympics is looking less likely.

In Shanghai, Huaxin Cement tumbled 5.04 pct to 1.941 usd, while Zhenhua Port Machinery, the heaviest weighted stock on the Shanghai B-share market, shed 3.84 pct to 1.277 usd.

Textile and garment firms continued to be hit by profit-taking.

Inner Mongolia Eerduosi Cashmere Products lost 3.47 pct to 0.975 usd, while Shanghai Kaikai Industry and Shanghai Haixin fell 1.57 pct and 1.52 pct, respectively, to 0.501 usd and 0.454 usd.

In Shenzhen, property firm Hainan Pearl River Holdings slid 5.88 pct to 2.88 hkd and China Merchants Property Development lost 3.52 pct to 9.60.

China Vanke, the country's top property developer by market value, was flat at 8.46 hkd after tumbling in the last two sessions.

Shenzhen Chiwan Wharf Holdings was down 1.54 pct at 10.84 hkd. The port operator said it handled 5.86 mln tons of cargo in July, up 12.6 pct year-on-year.

Airlines were lower, with Hainan Airlines falling 1.28 pct to 0.619 usd and Shandong Airlines slipping 0.82 pct to 3.63 hkd.

Analysts said airlines were hit by a slowdown in the yuan's appreciation. China's central bank set the yuan central parity rate at 6.8555 to the dollar this morning, compared with the record 6.8128 from mid-July.

The FTSE/Xinhua China B 35 Index was down 59.49 points at 6,748.75.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the morning down 12.93 points or 0.48 pct at 2,706.44.

(1 usd = 6.8 yuan; 7.8 hkd)