BEIJING - Chinese shares reverse early gains and headed downward for a third day on Wednesday after the government said it would not loosen the tightening over the property market as expected by many investors.

Yet speculation for an interest rate cut soon by the central bank to accelerate the slowing economy kept the benchmark indexes from declining too much.

The Shanghai Composite Index gained 0.16 percent at opening but moved into negative territory in the afternoon session and fell to the intra-day low of 2,301.03 points, barely above the key psychological support at 2,300. It narrowed losses during the last ten minutes of trading to close at 2,309.55, down 2.36 points, or 0.1 percent.

The Shenzhen Component Index posted a similar course to close at 9,812.98 points, down 34.14 points, or 0.35 percent.