China stocks fall on bank margin, bad loan worries

martes 27 de octubre de 2015 00:43 GYT

* Traders take profits after Monday's bounce

* Financial and resource stocks down

* Deposit rate liberalization, Ag Bank results weigh China stocks fell on Tuesday on fears that moves to liberalise deposit rates will squeeze banks' margins, and as some investors took profits after a rise in the previous session.

The CSI300 index fell 1.9 percent to 3,522.00 points by the end of the morning session, while the Shanghai Composite Index lost 1.8 percent to 3,367.33.

China CSI300 stock index futures for November fell 1.2 percent, to 3,415.4, nearly 107 points below the current value of the underlying index, pointing to expectations of further losses.

Mainland indexes bounced on 0.5 percent Monday following interest rate and reserve ratios cuts by the central bank late on Friday.

The moves were the latest in a year-long policy campaign to support the cooling economy, but investors on Tuesday were more focused on whether China's accompanying decision to scrap a long-standing ceiling on bank deposit rates would trigger a war among lenders for new funds.

Bankers who spoke to Reuters doubted such a scenario, reckoning lenders will focus on protecting margins instead, but the changing landscape added to worries about pressures facing banks as the economy slows.

Weak results from the Agricultural Bank of China Ltd late on Friday have heightened those concerns.   Continuación...