China's key stock index down 0.23 pct

China's key stock index -- the Shanghai Composite Index -- surrendered earlier gains to end the day with a 0.23-percent drop to 2,128.86 on Tuesday.

The Shenzhen Component Index gained 0.75 percent, or 62.24 points, to close at 8,398.92.

Combined turnover on the two bourses expanded to 246.9 billion yuan (40.23 billion U.S. dollars) from 169.59 billion yuan the previous trading day.

News surfaced in the morning session that China may soon pilot the preferred shares system to ease fundraising pressures, prompting a widespread rally led by banks, but the market quickly lost ground in later trading as investors digested the news.

Altogether 512 shares on the two bourses fell by over 5 percent on Tuesday, with those in tourism, papermaking and media sectors leading the declines.

Huayi Bros. Media Group went down 5.86 percent to 24.59 yuan per share, while Phoenix Media shed 7.09 percent to end at 9.96 yuan.

Bucking the trend, banking shares rose across the board, with Ping An Bank surging 7.54 yuan to end the day at 14.12 yuan per share.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, shed 1.36 percent, or 17.37 points, to close at 1,261.68 points on Tuesday.