Chinese shares fell for the first time in four days on Tuesday as most stocks were hit by profit-taking, but banks rose on the back of better-than-expected earnings at Merchants Bank. The Shanghai Composite Index hit an intra-day high of 5,480.070 points but ended 0.13 percent lower at 5,386.531, with losing Shanghai stocks overwhelming gainers by 715 to 147.
Turnover in Shanghai A shares expanded to a heavy 183.7 billion yuan ($25.3 billion), its highest level since the index was hitting its record intra-day peak of 6,124 points in mid-October, from Monday's 161.4 billion yuan.
Merchants Bank, a medium-sized commercial bank and China's biggest privately run lender, jumped 3.17 percent to a one-month high of 40.31 yuan, though it came well off its intra-day high of 41.22 yuan. In a preliminary estimate announced late on Monday, Merchants said net profit surged 110 percent last year. Analysts had expected slightly slower growth, of below 100 percent, and the result partially eased worries about the impact on banking profits of Chinese government pressure to curb loan growth.
Financial shares in general outperformed with Industrial & Commercial Bank of China, the nation's biggest bank, up 1.51 percent to 8.09 yuan. China Life Insurance climbed 3.99 percent to 58.13 yuan. CITIC Securities, China's largest listed brokerage, gained 2.60 percent to 92.88 yuan.
Among other blue chips, oil giant Sinopec jumped 2.63 percent to 24.22 yuan, possibly because of optimism about the government subsidy which it is soon expected to receive from the government in compensation for last year's refining losses. Property shares, which had rebounded sharply on Monday, fell back. Gemdale, a Shenzhen-based developer, slid 4.25 percent to 44.58 yuan.