China: Weak banks break stocks' 10-day winning streak

[SHANGHAI] China stocks snapped a 10-day winning streak on Wednesday as banks dragged major indexes lower after Agricultural Bank of China (AgBank) reported a drop in profit and a spike in bad loans as the economy slows.

Profit-taking also contributed to the fall, while analysts warned of rising volatility ahead as more people piled into the market betting on a further rally.

The banking index declined 2.8 per cent after AgBank late on Tuesday kicked off earnings reports from the country's "Big Four" banks this week. Its fourth-quarter net profit was below expectations while bad loans hit a three-year high.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.8 per cent, to 3,940.41, while the Shanghai Composite Index lost 0.8 per cent, to 3,660.73 points.

But small-cap stocks remained strong, with the Nasdaq-style board ChiNext rising 1.7 per cent to close at a record high despite lofty valuations.

Among the most active stocks in Shanghai were AgBank , down 2.1 per cent to 3.65 yuan; Zijin Mining, up 3.0 per cent to 4.53 yuan and Bank Of China , down 2.9 per cent to 4.31 yuan.

In Shenzhen, BOE Technology, down 2.6 per cent to 4.13 yuan; TCL Corp, up 1.5 per cent to 5.99 yuan and Myhome Real Estate Development Group, up 4.0 per cent to 5.00 yuan were among the most actively traded.

Total volume of A shares traded in Shanghai was 52.1 billion shares, while Shenzhen volume was 33.3 billion shares.

REUTERS