SHANGHAI, June 3 (Reuters) - A major China stock index slipped on Wednesday, after two sessions of strong gains, as a dozen new share offerings hit a market already pulled down by big banks on signs their margins could be hurt by accelerated interest rate liberalisation.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.4 percent, to 5,143.59, while the Shanghai Composite Index ended a sliver lower, at 4,909.98 points.
Shares of top banks sagged, after China launched certificates of deposit (CDs), paving the way for full interest rate liberalisation. But most smaller lenders ended firmer, as investors see them benefiting from the reform.
"While this is clearly a good step, it is adding some short-term pressure on the share price of banks as they will have to compete to attract deposits," wrote Gerry Alfonso, director of Shenwan Hongyuan Securities.
The market already faces pressure from this week's big batch of IPOs. One day after 11 IPOs were launched, 12 companies started taking subscriptions on Wednesday.
But there are signs that foreign interest in the world-beating market remains keen.
Vanguard Group said on Tuesday it plans to add mainland-traded A-shares to its broad emerging markets exchange-traded fund, making it the first broad-based emerging markets ETF to gain direct exposure to China's onshore market.
Bank of America Merrill Lynch said investors worldwide poured $4.5 billion into funds that specialize in Chinese stocks in the week ended May 27, the biggest weekly inflows into the funds since April 2008.
Most sectors in China were down, but pharmaceutical stocks remained bullish, amid concern over Middle East Respiratory Syndrome (MERS).
Shares of over a dozen drug makers, including Anhui Sunhere Pharmaceutical, Nantong Jinghua Pharma and Zhejiang Huatong Pharmaceutical all surged by their 10 percent daily limit.
Shares of Industrial Bank Co, Ping An Insurance Group Co of China and CITIC Securities all ended lower, after Industrial Securities suspended margin financing for purchases of the three stocks, the latest move by Chinese brokerages to tighten margin financing. (Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk)