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China shares retreat on concern about bad loans

China shares retreat on concern about bad loans

Chinese shares retreated Tuesday, ending a three-day rebound, as unease grew about possible bad bank loans and a reduction in liquidity.
The benchmark Shanghai Composite Index lost 77.63 points, or 2.6 percent, to close at 2,915.8 after plunging 5.5 percent in mid-afternoon trade before recovering. The Shenzhen Composite Index for China's smaller second exchange fell 2.3 percent to 975.53.
Investors were concerned about mixed signals on liquidity after Premier Wen Jiabao said in comments released Monday that easy credit would continue while the central bank drained money from the market by selling bills, analysts said.
The surge in bank lending that helped to drive the market rally also has led to fears that lenders might see a rise in bad loans.
"With the high bank lending in the first half year, interim results of banks reflected concerns of bad loans," said Dai Shuang, an analyst for United Securities in Shenzhen.
Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, fell 2.9 percent to 4.7 yuan. Bank of China Ltd. lost 2.7 percent to 3.93 yuan, while China Construction Bank Ltd. dropped by 4.3 percent to 5.53 yuan.
Baoshan Iron and Steel Co., China's biggest steelmaker, tumbled 5.8 percent to 7.02 yuan, and Jiangxi Copper Ltd., the country's second-biggest metal producer, sank 5.6 percent to 37.22 yuan.
China Vanke Ltd., the country's biggest real estate developer, shrank 5.7 percent to 10.69 yuan, while rival Poly Real Estate Group fell 4.3 percent to 24.15 yuan.
Tourism stocks rose on expectations of stronger revenues ahead of the Oct. 1 National Day holiday, a popular travel period.
Beijing Capital Tourism Co. and Beijing Jingxi Tourism Development Co. both surged by the daily maximum of 10 percent _ Capital Tourism to 19.4 yuan and Jingxi to 14.12 yuan.
In currency markets, the yuan strengthened to 6.8314 to the U.S. dollar, up from Monday's close of 6.8436.


Updated : 2021-07-31 07:21 GMT+08:00