Chinese shares fell 1.13 percent on Tuesday due to profit taking in banks and property developers, dealers said. The Shanghai Composite Index, which covers A and B shares, was down 35.22 points to 3,089.45 on turnover of 188.1 billion yuan (27.5 billion dollars).
"Today's correction is simply a technical one. We do not see a substantial risk in economic fundamentals as credit policy has not been tightened," Shenyin Wanguo Securities analyst Li Nian told Dow Jones Newswires. But some analysts said they were concerned the stock market's performance did not reflect the state of the real economy. The key index has surged nearly 70 percent since the beginning of the year.
"Investors might have been too optimistic about the domestic recovery. If we look at the still-negative consumer price index data in recent months, we see demand has not risen quickly," Guosen Securities analyst Wang Junqing said. Heavyweight banks led the declines.
China Construction Bank fell 3.0 percent to 6.38 yuan after gaining 9.1 percent in the previous four sessions, and Pudong Development Bank dropped 3.4 percent to 24.55 yuan after rising 10.3 percent in the same period. Among developers, China Vanke closed 2.5 percent lower at 14.09 yuan and Poly Real Estate Group lost 3.2 percent to 28.70 yuan, extending Monday's 2.8 percent fall after a 14.6 percent gain last week.
The Shanghai A-share index fell 36.98 points, or 1.13 percent, to close at 3,243.29 on turnover of 187.6 billion yuan, while the Shenzhen A-share index lost 2.30 points, or 0.22 percent, to 1,058.91 on turnover of 90.8 billion yuan. The Shanghai B-share index fell 2.09 points, or 1.05 percent, to 196.53, while the Shenzhen B-share index lost 6.74 points, or 1.30 percent, to close at 512.70.
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