SHANGHAI, Dec 11 (Reuters) - China stocks closed down on Thursday, hit by a slump in brokerages after local media reported that the regulator had set up a team to check brokers' margin business.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1.2 percent, to 3,183.01, while the Shanghai Composite Index lost 0.5 percent, to 2,925.74 points.
Sina Financial, a domestic Internet media firm, reported on Thursday that the China Securities Regulatory Commission (CSRC)had set up a special team to investigate brokerages' margin business and some of them could be punished.
Investors were also worried over market liquidity after CSRC approved ahead of schedule 12 IPOs late on Wednesday, a move which could cool a blistering rally in the country's stock markets which has seen the benchmark CSI index surge more than 30 percent in two weeks.
Western Securities Co dived to its 10 percent daily limit, with 14 brokerage shares sliding over 5 percent, including Haitong Securities Co, Founder Securities Co and Guohai Securities Co.
Among the most active stocks in Shanghai were Baotou Steel , up 6.0 percent to 4.45 yuan; China Shipbuilding , down 0.8 percent to 8.39 yuan and Hainan Airline , up 9.9 percent to 3.44 yuan.
In Shenzhen, BOE Technology, down 1.0 percent to 3.11 yuan; Xingrong Invest, up 10.0 percent to 7.28 yuan and Changjiang Securities Co, down 3.3 percent to 14.43 yuan, were among the most actively traded.
Foreign investment flowing into Shanghai from Hong Kong through the mutual market access pilot programme took up 1.07 billion yuan of the 13 billion yuan daily quota.
Total volume of A shares traded in Shanghai was 48.2 billion shares, while Shenzhen volume was 23.5 billion shares. (Reporting by Chen Yixin and Pete Sweeney; Editing by Jacqueline Wong)