BEIJING: China stocks closed weaker on Tuesday as banking stocks stepped back after Monday’s surge, as data showed increased factory sector deflation hurting the pricing power of Chinese firms.
Tighter liquidity also contributed to market weakness, analysts said, as investors started subscribing to new shares issued by Lens Technology Co Ltd, the first in a series of initial public offerings this week.
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China’s key banking sub-index, which jumped nearly 6 percent on Monday on expectations that lenders would soon be awarded brokerage licences, fell 2.5 percent, dragging down the main stock indexes.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.5 percent, to 3,520.61, while the Shanghai Composite Index lost 0.5 percent, to 3,286.07 points.
Among the most active stocks in Shanghai were Bank Of China , down 2.5 percent to 3.93 yuan; Agricultural Bank of China, down 2.7 percent to 3.20 yuan and Industrial Bank, down 3.1 percent to 14.25 yuan.
In Shenzhen, TCL Corp, up 2.3 percent to 5.29 yuan; BOE Technology, up 0.3 percent to 3.17 yuan and Bank of Ningbo, up 1.5 percent to 15.80 yuan were among the most actively traded.
