SHANGHAI stocks dropped in morning trading after data showed China's service sector expanded slightly in May.

The key Shanghai Composite Index shed 3.47 points, or 0.15 percent, to 2,268.95. Turnover stood at 36.1 billion yuan (US$5.9 billion) by midday.

HSBC China Service Purchasing Managers Index (PMI), a gauge of non-manufacturing activity at private and export-oriented enterprises, inched up to 51.2 in May, slightly up from a 20-month low of 51.1 in April, HSBC Holdings Plc and Markit Economics reported today.

A reading of 50 or above generally indicates the activity is expanding.

Property developers led the losers. Poly Real Estate, China's second-largest homebuilder, lost 1.1 percent to 12.04 yuan. Gemdale Corp fell 1 percent to 7.58 yuan.

Most solar power-related stocks suffered after the European Union imposed a tariff of 11.8 percent on solar panels from China.

EGing Photovoltaic Technology Co slid 4.3 percent to 9.41 yuan.