SHANGHAI stocks ended with the biggest decline in seven weeks after small caps suffered from weak economic data, home appliance makers were hit by expiring government subsidies and the market suffered a glut of unlock shares newly eligible for sale.

The benchmark Shanghai Composite Index fell for a fourth straight day, shedding 26.84 points, or 1.17 percent, to 2,272.42.

"Holders of small and medium-cap stocks got a wake-up call from HSBC's China Purchasing Managers' Index, which fell back into contraction territory again in May and recorded the lowest level in eight months," Guangzhou Wanlong Securities Consulting Co said today.

The index generally tracks privately owned companies, dominated by medium- and smaller-sized businesses.

Media firms, medical equipment producers and motorcycle makers were the biggest losers. The ChiNext index for start-up companies slid 29.68 points, or 2.8 percent, to 1,022.46.

Shares in home appliance makers declined after the government ended subsidies aimed at increasing consumer spending. Hisense Electric Co dropped 3.5 percent to 12.41 yuan. Qingdao Haier Co lost 1.96 percent to 12.49 yuan.

Market sentiment is also being undermined by volumes of locked shares ending their non-tradable period and coming onto the market for sale.

In May, investors sold a net of 24.7 billion yuan (US$4 billion) of non-tradable shares when they emerged from locked status. That was an increase of 19.4 billion yuan from April, according to China Galaxy Securities.

An estimated 1.12 trillion yuan of currently non-tradable shares will be released to the market in the next three months, according to Galaxy. Big stakeholders in initial public offerings are sometimes prohibited from selling shares for a specified period of time.