China stocks slip as blue-chip counters reverse recent gains

SHANGHAI, July 12 (Reuters) – China stocks reversed earlier
gains to end lower on Wednesday, as investors taking part in a
big-cap rally seen in recent weeks paused for breath, ahead of
Federal Reserve Chair Janet Yellen’s address to congress.

The blue-chip CSI300 index fell 0.3 percent, to
3,658.82 points, while the Shanghai Composite Index shed
0.2 percent to 3,197.54 points.

An index tracking 50 blue-chips in Shanghai considered most
representative of their sectors, dubbed the “Nifty 50”,
hit a 23-month high before edging 0.2 percent lower, with strong
gains pared in heavyweight banking shares.

“The bull run in bank stocks is mainly due to improved
profitability in those lenders amid a weak recovery in the
economy,” said Sun Lijin, an analyst with Pacific Securities.

The lenders were also chased for their valuations and solid
fundamentals, Sun said, adding he expected them to continue to
outperform.

Small-caps steadied, but there were still 10 such firms
slumping the 10 percent trading limit.

Analysts said the sluggishness was due in part to concerns
about mid-year earnings and expectations of more equities coming
onto Chinese markets

The defensive consumer and healthcare stocks
led the decline, while gains were seen in banking
and real estate plays.

China Merchants Bank, touched a more than
nine-year high before edging up 1.2 percent. The stock has
gained 38.3 percent this year.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Sam
Holmes)

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