Shanghai key stock index Tuesday posted the largest daily decline in six weeks on concerns of tighter liquidity and slowing economic recovery.

The benchmark Shanghai Composite Index lost 2.89 percent, or 77.26 points, to close at 2,595.27. Turnover was 129.6 billion yuan (US$19.1 billion), slightly higher than Monday's 128.4 billion yuan.

The General Administration of Customs said yesterday that import volume in July grew 22.7 percent from a year earlier, but dipped 0.4 percent from June.

The figures indicate shrinking domestic demand as economic development slows, market watchers said. Consumer Price Index and other macro-economic figures for July are set to be released today.

"Financial sectors were weak due to inflation concern, and investors also took profits from consumer shares which have been strong in the past few days," said Xu Yunkai, vice investment director of China International Fund Management.

China Everbright Bank yesterday launched offline and online subscription for its initial public offering in Shanghai. It plans to raise up to 18.9 billion yuan in the second-largest IPO in China this year.

The Bank of Communications tumbled 2.78 percent to 6.30 yuan. The Industrial and Commercial Bank of China, the nation's biggest lender, fell 1.65 percent to 4.17 yuan.

Auto shares fell following a 11.9 percent fall in China's auto sales from June to 1.2 million vehicles in July. SAIC Motor Corp was down 1.8 percent to 14.99 yuan.