BEIJING, March 6 -- Chinese shares closed lower on Friday as investors traded cautiously and awaited new policy signals.

The benchmark Shanghai Composite Index moved down 0.22 percent to finish at 3,241.19 points. The Shenzhen Component Index shed 1.50 percent to close at 11,392.40 points.

Combined turnover on the two bourses shrank to around 650 billion yuan (106 billion U.S. dollars).

Shares in medical equipment, media and entertainment as well as measuring instruments were the biggest losers, with sub-indices tracking the three sectors dropping 3.62 percent, 3.42 percent and 3.08 percent respectively.

Bucking the trend, railway shares were strong on the news that the country's state assets watchdog has approved a merger plan for China's two top bullet train makers, China CNR and China CSR.

Shares in CNR and CSR both opened higher and surged 8.01 percent and 7.57 percent respectively.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, plunged 3.15 percent on profit-taking to close at 1,951.40 points.

The index has advanced in recent months and passed the 2,000-point mark earlier this week. The average price-to-earnings ratio of shares listed on this board has surged to 80, prompting many investors to sell stocks to lock in profits.