SHANGHAI stocks declined for a second day yesterday as information technology firms plunged following in the footsteps of their peers on China's Nasdaq-style bourse in Shenzhen.

The key Shanghai Composite Index shed 12.15 points, or 0.6 percent, to close at 2,021.17 points despite gains by distilleries and railway stocks.

IT firms paced the decline of small-cap shares as the ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, slumped 4.4 percent, the second-biggest daily loss within the year, to 1,150.39 points.

"Downward pressure on growth stocks is mounting as they approach a record-high level," Guosen Securities said in a report yesterday.

Fiberhome Telecommunication Technologies Co fell 7.9 percent to 19.61 yuan (US$3.195). Aisino Co Ltd, a developer of computer system applications, slid 4 percent to 16.07 yuan.

The decline also came amid concern over liquidity after BOE Technology Group Co, a Shenzhen-listed supplier of display products and solutions, said it plans to refinance up to 46 billion yuan through a private placement, the biggest share offering on the A-share market this year.

Railway shares outperformed after the government said it would increase financing channels to boost railway investment. Fujian Longxi Bearing (Group) Co, a maker of railway parts, mechanical basic parts, leaped 7.8 percent to 8.05 yuan. Daqin Railway Co added 3.8 percent to 6.06 yuan.

Distilleries gained. Kweichow Moutai Co, a leading producer of high-end liquor, rose 2.4 percent to 178.74 yuan. Sichuan Tuopai Shede Wine Co jumped 4.3 percent to 19.45 yuan.