Chinese mainland's stocks fell, dragging the benchmark index down by the most in a week, on concern that proposed rules for banks may curb credit growth and speculation intensified that the government won't loosen property restrictions.

The Shanghai Composite Index fell 26 points, or 1.2 percent, to 2,201.35 at the close, the biggest drop since June 25.

"Investors are concerned about company earnings in the second quarter and there are expectations of further cuts in profit forecasts," said Chen Liqiu, a strategist at Jianghai Securities Co in Shanghai. "They are expecting property curbs to ease and it turns out it may be quite the opposite, so this is dragging on sentiment."

The Shanghai gauge has fallen 1.1 percent this month, adding to a June plunge of 6.2 percent, on concern the government isn't doing enough to stem an economic slowdown.

China Daily - Agencies