Chinese equities retreated on Monday, driving the benchmark Shanghai stock index down below the psychologically-important 3,000-point level, on concerns over government moves to cool economic growth and squash inflation. Bank shares fell across the board as last Thursday's higher-than- expected consumer price index (CPI) had triggered market speculation that the government would hasten to scale back bank lending to ward off inflation. China Merchants Bank led the losses by dipping 2.55 percent to 14.89 yuan. Industrial and Commercial Bank of China, the nation's largest commercial bank, edged down 0.62 percent to 4.83 yuan. The benchmark Shanghai Composite Index closed at 2,976.94 points, down 36.47 points, or 1.21 percent. The Shenzhen Component Index closed at 11,903.33 points, down 265.78 points, or 2.18 percent. Combined turnover shrank to 130.39 billion yuan (19.09 billion U.S. dollars) from 155.41 billion yuan the previous trading day. Losers outnumbered winners by 613 to 255 in Shanghai and 596 to 299 in Shenzhen. The benchmark index was also dragged down by steelmakers as the international iron ore price negotiations reached an impasse. Baoshan Iron & Steel Co, the country's largest steelmaker, slid 2.63 percent to 8.13 yuan. Hebei Iron & Steel Co, the listed arm of China's second biggest steelmaker, shed 3.02 percent to 5.45 yuan. PetroChina, the country's biggest oil producer, fell 1.25 percent to 12.66 yuan as international crude oil price fell last Friday. Shenhua Energy Co., the country's largest coal producer, fell 2.19 percent to 28.14 yuan on worries over government environmental policies that could raise its costs. 