Stocks on the Chinese mainland fell, dragging the Shanghai Composite Index from a two-week high, as the government damped speculation of a large-scale stimulus program to revive economic growth.

Anhui Chaodong Cement Co and Hebei Iron & Steel Co paced losses among building-material makers after Xinhua News Agency reported the nation has no plans to introduce stimulus measures on the scale deployed during the 2008 global financial crisis. Sany Heavy Industry Co, China's biggest machinery maker, dropped 0.9 percent. The company was said to cut the size of a share sale in Hong Kong. Gemdale Corp advanced 1 percent as JPMorgan Chase & Co recommended real-estate stocks.

The Shanghai Composite Index fell 0.2 percent to 2,384.67 at the close. The gauge climbed 2.4 percent in the past two days to its highest level since May 11. The CSI 300 Index retreated 0.3 percent to 2,642.26.

"The Xinhua report may disappoint investors and put them in doubt whether the current scale of the stimulus plans will be enough to reverse the slowdown in economic growth," said Wang Weijun, a strategist at Zheshang Securities Co in Shanghai. "Whether these measures will work needs to be closely watched."

The nation rolled out a 4-trillion-yuan ($630 billion) package in 2008 to help the economy battle the global financial crisis.

The Shanghai Composite has slipped 0.5 percent this month. It has climbed 8.4 percent this year on optimism the government will ease monetary policies and accelerate approvals of infrastructure projects to spur growth.

Anhui Chaodong Cement lost 1.1 percent to 13.91 yuan. Jiangxi Wannianqing Cement Co fell 1 percent to 14.87 yuan. Hebei Steel, the listed unit of China's biggest steelmaker, slid 0.7 percent to 3.08 yuan.

Premier Wen Jiabao has vowed to focus more on increasing growth after trade and domestic demand were below forecasts in April, data that prompted economists to pare outlooks for the world's second-largest economy. The government may spend as much as 2 trillion yuan to stimulate the economy, Credit Suisse Group AG said in a report on Monday.

Increased lending

"The Chinese government's intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth," Xinhua said on Tuesday in a Chinese-language article on economic policy, without attributing the information. "The current efforts for stabilizing growth will not repeat the old way of three years ago."

Chinese lenders have received verbal instructions from their headquarters or regulators to increase lending to support economic growth, Market News International reported on Monday, citing unidentified people from the banking industry. The orders came in response to government signals of accelerated investment project approvals, it said.

Sany Heavy lost 0.9 percent. The company reduced its Hong Kong share sale to about $2 billion, roughly 10 percent of its enlarged share capital, two people with knowledge of the transaction said. The offering may start in the next few months, they said.

Kweichow Moutai Co, China's biggest producer of baijiu liquor by market value, advanced 1.4 percent to 228.66. The liquor maker's per-share earnings may rise 61 percent this year and 41.7 percent in 2013, analysts at Shenyin & Wanguo Securities wrote in a report on Wednesday.

Property stocks

Gemdale, China's fourth-biggest publicly traded property developer, rose 1 percent to 7.06 yuan. China Merchants Property Development Co gained 0.8 percent to 25.96 yuan.

There's market speculation that the government may fine-tune restrictions on home purchases and China has room to ease policy implementation, especially in lower-tier cities, JPMorgan analysts wrote in a note on Tuesday. Home transactions may beat expectations and decrease inventories, helping developers regain pricing power by the end of the year, according to the report.

China's National Bureau of Statistics and logistics federation are due to release its purchasing managers' index for May on Friday. The measure may fall to 52 from 53.3 a month earlier, according to the median estimate of 26 economists in a Bloomberg survey. Fifty is the dividing line between expansion and contraction.

SouFun Holdings Ltd, the owner of China's biggest real estate website, climbed 16 percent, the steepest advance in seven months. Spreadtrum Communications Inc surged to the highest level in almost four months after Nomura Holdings Inc and JPMorgan Chase & Co recommended buying shares of the mobile-phone chipmaker.