Weak banks and other blue chips pulled down China's main stock index on Wednesday, although many second-tier shares gained in active trade. The Shanghai Composite Index, which had climbed 6.39 percent in the previous two days, closed down 0.68 percent at 1,924.012 points.
But gaining Shanghai A shares outnumbered losers by 489 to 408, and turnover in Shanghai A shares remained fairly active at 63.7 billion yuan ($9.3 billion) against Tuesday's 68.7 billion. Propelled by hopes that government stimulus steps will start having an impact on the economy in coming months, said Zhang Yanbing, analyst at Zheshang Securities.
China Construction Bank fell 2.52 percent to 3.87 yuan after Bank of America sold $2.83 billion of its Hong Kong-listed H shares in Construction Bank at a 12 percent discount, pushing the H shares down over 8 percent.
Zhang said the sale was not a major surprise, but the possibility of more such sales of Chinese bank stocks later this year might continue to weigh on the market. Bank of China, in which institutions including Royal Bank of Scotland and Singapore's Temasek are major investors, slipped 1.96 percent to 3.01 yuan. The Ministry of Industry and Information Technology said it would issue licences for next generation (3G), mobile networks to its three state-run carriers on Wednesday afternoon.
But telecom shares had already risen in previous days on expectations for this, and they fell back amid profit-taking on Wednesday. China United Telecommunications lost 1.89 percent to 5.19 yuan, while equipment maker ZTE dropped 4.03 percent to 27.83 yuan. It became the first firm to benefit from the banking regulator's decision last month to permit such loans; previously, bank loans could generally not be used for acquisitions.
Xiangtan Electric Manufacturing surged 10 percent to 8.99 yuan after saying it had been designated a high-technology firm by Hunan province, allowing it to enjoy a preferential tax rate.
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