UPDATE 1-China's big five banks rise on draft deposit insurance rules
(Updates with others banks, adds context)
SHANGHAI Dec 1 (Reuters) - Mainland listed shares in China's big five banks jumped on Monday but later pared gains, after the country issued draft regulations to introduce a bank deposit insurance scheme for the first time.
Offshore investors also reacted cautiously to the news, with the banks' Hong Kong listed shares falling.
Industrial and Commercial Bank of China Ltd , the country's largest lender, rose more than 2 percent in Shanghai, before easing to trade flat, while Agricultural Bank of China Ltd retreated from a high up more than 3 percent to trade little changed.
China Construction Bank Corp held on to gains after opening up 1.9 percent and Bank of Communications Co Ltd , the country's fifth largest lender, was up nearly 3 percent.
The move on Sunday was the latest in a series of steps to liberalise interest rates and allow banks to compete on a fully commercial basis.
While mainland investors continue to pour more money into banking shares, Hong Kong traders are wary that the mainland rally is getting overbought.
That has caused an index measuring price differences between dual listed shares in Hong Kong and Shanghai to hit its highest level since July 2013, as the two markets continue to diverge in terms of valuations.
China banking shares rallied massively on Friday, with the index of major Chinese banks gaining more than 8 percent in a single day. Continuación...