The losses spilled over into domestic equities Wednesday dragging both the Shanghai and Shenzhen benchmarks to their lowest in more than a month.

Metals producers such as Jiangxi Copper led the losers.

"We seem to be at the peak for the global commodity markets," said Zhang Ling, who helps manage the equivalent of US$2.4 billion (HK$18.7 billion) with ICBC Credit Suisse Asset Management in Beijing. "That's led investors to dump their metals shares."

The Shanghai Composite Index, which covers yuan-denominated A shares and foreign-currency B shares, dropped 1.1 percent, to 1531.33. The Shenzhen Composite Index dipped 1percent, to 396.37.

Jiangxi Copper, China's largest listed producer of the metal, tumbled 4.4 percent, to 9.96 yuan (HK$9.66).

Copper prices on the Shanghai Futures Exchange dropped by the daily maximum allowable limit for a fourth day in a row.

Copper for delivery in August, the contract with the largest open interest, fell 2,410 yuan, or 4 percent, to 57,760 yuan a metric ton.

Trading in two copper contracts in Shanghai, for delivery this month and in October, was suspended, the exchange said. The moves are in line with the exchange's rules, it said.

Copper prices in Shanghai have dropped by about a third since they reached a record 85,550 yuan a ton on May 15. The margins for trading aluminum for delivery in June, July and August were raised to 20 percent, 15 percent and 7 percent, respectively, the statement said. Margins for copper for delivery in November, December, January and March were raised to 9 percent, while the figure for July delivery was raised to 15 percent, it said.

Margins are sums of cash that investors must deposit with brokers when borrowing to buy futures contracts or other securities.

High copper prices are hurting buyers such as cable producers which have problems asking their customers to pay more, said Fabio Romeo, a general manager at Prysmian Cables & Systems, a Milan-based energy cable producer, Tuesday.

"When copper was at US$5,000, it was a real problem. Now it's a nightmare," he said.

Stocks also fell on concern more sales of new shares will divert capital and dilute the markets. Air China plans to raise about eight billion yuan selling local-currency shares in Shanghai.

On the upside, Shanghai Pharmaceutical surged by their 10 percent daily limit to 5.2 yuan after the company's parent won regulatory approval to make the antiviral drug Tamiflu. China Tuesday reported a new suspected human infection of avian influenza. BLOOMBERG