SHANGHAI: China’s major stock indexes retreated on Tuesday, led lower by resource firms after their recent strong rally, even as a fresh pledge by Beijing to prevent ‘systemic’ financial risks reignited fears of tighter regulations.

The blue-chip CSI300 index fell 0.6 percent, to 3,719.56 points, while the Shanghai Composite Index lost 0.2 percent to 3,243.69 points.

Most sectors sank, led by real estate and material shares, which had rallied strongly since June on expectations of robust mid-year earnings growth amid an industry recovery and a weaker dollar.

China’s Politburo, the Communist Party’s top decision-making body, said Beijing will implement a “proactive” fiscal policy and “prudent” monetary policy in the second half of the year, Xinhua reported on Monday.

China will also strengthen coordination of financial regulation, stabilise the property market and prevent systemic financial risks, according to a statement following the meeting chaired by President Xi Jinping.

Regulators issued a flurry of measures earlier in the year to crack down on riskier forms of financing, but paused recently to review if they were affecting economic growth.

After second-quarter growth exceeded expectations, many analysts expect the government has room to keep those administrative measures in place for at least the rest of the year, with a possibility of more targeted action if risks appear to flare again. China’s economy is likely to grow at an annual rate of around 6.7 percent in the second half of 2017, slowing slightly from the first half of the year, the State Information Center (SIC) said on Tuesday.

China’s mutual fund managers remained overweight on industry heavyweights in the second quarter, Changjiang Securities wrote in a report, adding sector leaders are more attractive for their business performance and valuations.—Reuters