• The blue-chip CSI300 index fell 0.7pc to 3,845.61, while the Shanghai Composite Index dropped 0.3pc to 2,836.80 points.
• Profits at the country's industrial firms fell at a slower pace in April, but the economy faces persistent pressure as activity and demand remain weak.

The blue-chip CSI300 index fell 0.7pc to 3,845.61, while the Shanghai Composite Index dropped 0.3pc to 2,836.80 points.

US President Donald Trump said on Tuesday that he was preparing a strong response to China's planned national security laws for Hong Kong, adding it would be announced before the end of the week.

Investors are also closely monitoring the pace of China's economic recovery from the coronavirus crisis.

Profits at the country's industrial firms fell at a slower pace in April, but the economy faces persistent pressure as activity and demand remain weak.

"Risks of a second COVID-19 wave and further geopolitical tensions cannot be ruled out, but these have yet to morph into material impact at this point," said Jingyi Pan, a Singapore-based market strategist at financial services firm IG.

Frank Benzimra, head of Asia equity strategy at Societe Generale, said he expects more fiscal and monetary efforts by Beijing to fight unemployment, which could benefit Chinese sectors including infrastructure.

China's consumer staples sector fell 1.15pc and the healthcare sub-index dropped 1.96pc, while the real estate index rose 0.19pc.

The smaller Shenzhen index ended down 0.85pc and the start-up board ChiNext Composite index fell 1.964pc.

The largest percentage gainers in the main Shanghai Composite index were Sichuan Hongda Co Ltd, up 10.19pc, followed by Silvery Dragon Prestressed Materials Co Ltd Tianjin, which rose 10.14pc and Shangying Global Co Ltd , up 10.08pc.

The largest percentage losers in the Shanghai index were Kingfa Sci&Tech Co Ltd, down 10.01pc, followed by Sinovel Wind Group Co Ltd, dropped 8.7pc, and Zhejiang Jiuzhou Pharmaceutical Co Ltd, down by 7.31pc.