China shares were lower in early trade, with investors taking profits after the key index rose 7.6 pct yesterday, in the absence of confirmation from the government of yesterday's stimulus package rumors, dealers said.

Steelmakers and power producers led the decline, while brokers extended their gains.

At 9:48 am, the benchmark Shanghai Composite Index was down 35.70 points or 1.41 pct at 2,487.58 .

Huadian Power International (SHA 600027; HK 1071) was down 4.85 pct at 4.32 yuan and Huaneng Power International Inc (SHA 600011; HK 0902) fell 5.87 pct to 7.06 yuan.

Baoshan Iron & Steel (Baosteel) (SHA 600019) shed 2.19 pct to 7.16 yuan after rising 8.12 pct yesterday.

Banks also retreated with China CITIC Bank (SHA 601998; HK 0998) falling 1.29 pct to 5.37 yuan. The bank said first-half net profit rose 162.6 pct from a year earlier to 8.42 bln yuan under Chinese accounting standards.