Leading losses onshore, a 5.45% September 2024 exchange-traded bond issued by Zhenro Properties Group slumped more than 25%, triggering an automatic trading suspension, a day after it fell about 10%.

Onshore bonds issued by units of developers Logan Group Co, Guangzhou R&F Properties, Shimao Group Holdings and Ronshine China Holdings fell between 2% and 7%, dominating the Shanghai Stock Exchange's list of the day's biggest losers.

Zhenro's dollar bonds dived even more, with a 7.1% September 2024 bond quoted by data provider Duration Finance at less than 15 cents on the dollar, yielding nearly 118%.

Zhenro, China's 30th-biggest property developer by sales, saw its shares slump more than 14% a day after Moody's cut its rating and lowered its outlook, citing heightened refinancing and default risks. Moody's also cut the rating for Logan Group, placing it on review for a further downgrade.

On Tuesday, Fitch Ratings cut Zhenro's rating and flagged a negative outlook.

The downgrades come amid market speculation, labelled "fictitious" by Zhenro, over its ability to service upcoming debt maturities, and follow its announcement of aggregated contracted sales of 7.897 billion yuan ($1.24 billion) in January, down from 11.197 billion yuan a year earlier.

"Sales were down 40% to 50% year on year (for some developers) ... based on this we expect policymakers will launch more supportive measures," said Raymond Cheng, an analyst at CGS-CIMB Research in Hong Kong.

"But in the near term those developers, if they have liquidity problems then they still really have problems ... This concern is spreading out to midsized developers."

The Hang Seng mainland properties index fell 1.4% against a 1.1% drop in the Hang Seng. The CSI300 real estate index fell 1.1% as the blue chip index notched a 0.8% gain.

($1 = 6.3538 yuan)

(Reporting by Andrew Galbraith)