China stocks slip as blue-chip counters reverse recent gains

Shanghai: 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 per cent, to 3,658.82 points, while the Shanghai Composite Index shed 0.2 per cent 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 per cent 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 per cent 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 per cent. The stock has gained 38.3 per cent this year.