Chinese investors opened 704,900 stock trading accounts in August, the smallest number in 20 months. The news came as huge market losses dampened investor enthusiasm.

Fewer people were willing to enter the market. The Shanghai Composite Index had fallen 65 percent from its record high of 6,124.04 on October 16.

The index rose for the first time in three days on Tuesday, edging up 0.11 percent to finish at 2,145.78.

A total of 10.9 million stock trading accounts were opened in the first eight months of the year, 60 percent less than the period a year ago. Through August, the total amount of stock investors was more than 120 million.

Investor sentiment was extremely low and they reduced holdings following the sharp slump. The number of investors holding yuan-denominated A shares had fallen to 47.4 million through August from 47.9 million a month ago, the lowest in four months.

The benchmark Shanghai index bucked the trend to retreat 2.68 percent on Monday, while regional markets rallied as investor confidence was lifted by the U.S. government decision to take over mortgage giants Fannie Mae and Freddie Mac to stabilize the market.

The market also shrugged off the news the Chinese securities regulator would allow institutional shareholders of listed firms to issue exchangeable bonds to ease oversupply of shares after the lock-up periods expired.

Analysts said it would take time to lift the dismal mood with the deepening concern of slower economic growth. China was slated to release its main economic data, including consumer price index, fixed asset investment and trade surplus, on Wednesday.

(Xinhua News Agency September 10, 2008)