The blue-chip CSI300 index <.csi300> was unchanged at 3,424.17 points, while the Shanghai Composite Index <.ssec> added 0.1 percent to 3,064.08 points.
Moody's Investors Service downgraded China's long-term local and foreign currency issuer ratings on Wednesday, citing expectations that the country's financial strength would erode in coming years as economic growth slows and debt continues to mount. The benchmark stock indexes fell more than 1 percent shortly after the market opened, but recouped most of the losses to close roughly flat. The downgrade has had "a negative psychological impact on the market," said Tian Weidong, strategist at Kaiyuan Securities, adding Beijing's campaign to clean up the financial system was already driving up market rates and sowing panic among retail investors.The market has already been hobbled in recent weeks amid signs that Beijing's regulatory crackdown on shadow banking and risky investment is pushing up short-term borrowing costs and threatening to slow the economy.In a rare sign of tightening liquidity in the interbank market, the one-year Shanghai Interbank Offered Rate (SHIBOR)