SHANGHAI - CHINA shares fell on Tuesday as investors disappointed by a meager interest rate cut and worried about its potential impact on banks' balance sheets dumped financial shares and other heavyweights.

The benchmark Shanghai Composite Index tumbled 4.55 per cent, or 90.53 points, to 1,897.22 in an afternoon rout that saw heavy losses in banks, insurers, airlines, resource and property shares.

PetroChina, the market's heaviest weighted share, fell 4.6 per cent to 10.43 yuan.

China cut interest rates late on Monday for the fifth time in four months in a new effort to revive economic growth amid mounting anxiety about spreading job losses and worker protests. But the 0.27 percentage point cut in the benchmark one-year lending rate failed to impress investors, analysts said.

'Most bank shares fell on concerns over the impact of lower interest rates on their profits,' said Peng Yunliang, an analyst at Shanghai Securities, in Shanghai.

'Rationality was discarded in panic selling,' Mr Peng said.

'Investors' confidence is on the edge of collapse.'

Though a rate cut might be expected to boost property shares, major real estate developers also were hit as investors cashed in on recent gains.

Poly Real Estate dropped 6.4 per cent to 16.03 yuan and China Vanke Ltd, the country's biggest developer, lost 4.9 per cent to 6.98 yuan. -- AP