SHANGHAI stocks declined today following three day of gains as dismal data pointed to a tepid growth in China's non-manufacturing sector, reviving fears of slowdown in the world's second largest economy.

The key Shanghai Composite Index lost 12.29 points, or 0.61 percent, to 1,994.27. Turnover was 76.7 billion yuan (US$12.6 billion) at the trading close.

China Service Purchasing Managers Index, a gauge of business activity in non-manufacturing sectors, fell in June to a 9-month low of 53.9 percent, down 0.4 percentage points from May, China Federation of Logistics and Purchasing reported today. A reading of 50 or higher indicates the activity is expanding.

Cai Jin, vice chairman of CFLP, said the decline was due to a slower growth in real estate construction due to seasonal factors while demand in the housing sector remained weak with new orders contracting for a third consecutive month.

Poly Real Estate, China's second largest developer, dropped 2.1 percent to 9.66 yuan. Gemdale Coporation slid 3.1 percent to 6.65 yuan.

A separate service PMI index, released later by the HSBC Holdings PLC, posted a moderate gain to 51.3 in June from May's 51.2, signaling weak momentum in China's non-manufacturing sector, which accounts for nearly half of the country's total economy.

Lenders continued a weak run. The Industrial and Commercial Bank of China Ltd, the nation's largest lender, lost 2 percent to 3.94 yuan. Industrial Bank Co fell 1.3 percent to 9.02 yuan. Shanghai Pudong Development Bank Co declined 1.4 percent to 8.04 yuan.