Beijing - Shares in China's main stock market lost 2.5 per cent on Monday, continuing a downward trend after the central bank governor warned on Friday that more tightening measures were likely.

The key Shanghai Composite Index, which tracks shares traded in foreign and Chinese currency, closed at 2,760.42, down 71.32 points, a loss of 2.52 per cent.

The smaller Shenzhen Component Index also plunged by 1.44 per cent, after bank governor Zhou Xiaochuan said the government would strengthen its measures to curb inflation and limit the effect of higher fuel prices, which rose by up to 18 per cent last week.

During a visit to New York on Friday, Zhou said the rises in fuel costs could add to consumer price inflation and force the government to take more action.

Stocks had already fallen last week after Zhou's earlier warning about anti-inflationary measures and an apparent fall in investors' optimism that that the government might intervene to bolster the markets, the Shanghai Daily newspaper said.

Large falls last week continued a period of strong daily fluctuations amid an overall downward trend in China's inflated share prices, with analysts expecting recent volatility to continue.

Shanghai Daily last week said concerns about the economy had "escalated into a loss of confidence in the stock market." (dpa)