Chinese shares fell for a fourth straight session, closing 0.42 percent lower on Thursday as banking stocks led the market down on profit-taking amid a broader technical correction.
The benchmark Shanghai composite index closed at 1,245.166 points after slipping 0.76 percent on Wednesday. It chalked up its biggest single-day percentage fall in nearly seven months on Tuesday.
Banking counters led the sell-off after Shanghai-listed Pudong Development Bank Co Ltd resumed trading as it finished its internal share reform.
Pudong Bank fell nearly 10 percent to 11.01 yuan a share by close after its shareholders agreed to its plan for floating all its government-owned shares.
Bigger rival Minsheng Banking Co Ltd also fell 2.05 percent to nearly 4.80 yuan, while top Shanghai-listed China Merchants Bank Co Ltd declined almost 1 percent to 6.09 yuan on profit-taking, dealers said.
"Banking shares gained very well in previous trades and some investors thought it was a good chance now to sell off, especially after Pudong Bank finished its reform," said Peng Yong, analyst at ABN Amro Xiangcai Fund Management Co.
State media reported on Thursday that Beijing was shifting some state holdings in listed firms to boost its undercapitalised national pension fund, which some say may cause market jitters.
However, analysts ruled out any major impact from the move, as investors reckoned it was part of Beijing's unpopular programme to float $250 billion in non-traded shares.
China's major index has been Asia's worst performer over the past two years but started to rebound late last year. It has risen about 8 percent so far in 2006, partly buoyed by Beijing's repeated pledges to boost the markets.
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