China's stocks dropped the most in the month as increasing concern mount over companies damaged by the earthquake and inflation risks by reconstruction after-quake.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, closed at 3,443.16, down 4.48 percent, or 161 points, the lowest since April 23.

According to the statistics said by the Ministry of Industry and Information, the 8.0-magnitude earthquake that hit Sichuan on May 12 affected 14,207 industrial companies, which have caused economic losses of 67 billion yuan.

Concern has deepened that the earthquake will boost inflation and slow economic growth further, said an analyst in Shanhai, according to Bloomberg. There is speculation that the government will take measures to tame inflation in future.

China Inflation Earthquake