(Yicai Global) Jan. 29 -- China's stock markets  closed lower today as concerns over a global economic slowdown  outweighed other factors in the country. The decline comes despite a  significant rebound in afternoon trading after the securities regulator  denied a rumor related to possible market shorting. 

The China Securities Regulatory Commission  dismissed a rumor that its new chairman would set up a market shorting  mechanism as fake news this afternoon.

The Chinese regulator allows shorting activities in  its market though they are highly restricted and therefore uncommon.  With major indexes having slumped for almost one year, any mention of  shorting could hit market confidence again.

The country's major market indexes were all down  more than 1 percent at one point in the morning session but began to  rebound in response to the CSRC's denial. 

The benchmark Shanghai Composite Index closed down  only 0.11 percent at 2,594.25 points, it had been as low as 2,559.98  intraday. The Shenzhen Component Index fell 0.5 percent to 7,551.30  while the ChiNext Price Index, which tracks growth enterprises in  Shenzhen, was down 1.28 percent at 1,243.59 points.

Only a handful of sectors closed in the black with  ferrous metals makers and property developers leading the way. Banks and  the insurance sector also attracted some interest from investors. Many  stocks that closed higher were large-cap companies.

On the other end of spectrum, internet-related  stocks were among the hardest hit, along with instrument manufacturer,  nonferrous metal players and logistics providers.