* SSEC -0.3 pct, CSI300 -0.4 pct
* China c.bank injects $73.4 bln of liquidity in April, 18 pct less than March
* C.bank seen further tightening policy
SHANGHAI, May 3 China' main stock indexes extended losses on Wednesday morning,
as investors were restrained by lingering worries over tougher regulation and a shift toward
tighter policy to defuse potential debt-fueled bubbles in the economy.
The CSI300 index fell 0.4 percent, to 3,414.39, while the Shanghai Composite
Index lost 0.3 percent, to 3,133.40 points.
Zhang Qi, an analyst with Haitong Securities said that tight liquidity could curb demand for
equities, although he said the risks of a sharp downturn in the benchmark Shanghai Composite are
The SSEC is up 1.0 percent year-to-date, but has lost 4.7 percent from its 15-month high hit
in mid-April, when concerns about tighter policy and the broader economic outlook triggered a
China's central bank injected 506.39 billion yuan ($73.48 billion) into the financial system
via short- and medium-term liquidity tools in April, down 18 percent from the previous month,
signalling a bid to rein in rapid credit growth.
On Wednesday, the People's Bank of China (PBOC) said it had injected 200 billion yuan into
money markets through open market operations, but it made no mention of maturing medium-term
lending facility (MLF) loans.
After years of super-loose policy, the PBOC has cautiously shifted to a modest tightening
bias in recent months and regulators have stepped up a crackdown on riskier forms of financing
as authorities try to contain financial risks from years of debt-fuelled stimulus.
On the day, most sectors lost ground, led by real estate stocks, not helped by
news that the Beijing branches of some major Chinese banks have raised interest rates on housing
loans for first- and second-home buyers - the latest of several steps by authorities to check
the heated property investment.
China's Pangda Automobile Trade tumbled as much as 10 percent for suspected
violations of securities laws and regulations.
Last month, China's insurance regulator warned it will ramp up its supervision of insurance
companies and threatened to investigate executives who flout rules in an effort to root out
Analysts expect the broad regulatory clampdown to continue, and the central bank to continue
to further tighten policy, though most believe authorities will tread cautiously to avoid
hitting economic growth.
($1 = 6.8916 Chinese yuan renminbi)
(Reporting by Luoyan Liu and John Ruwitch; Editing by Shri Navaratnam)