SHANGHAI Feb 7 China stocks pulled back on
Tuesday on fresh signs the government was moving to deflate
potential credit bubbles in the broader economy, reinforcing
recent central bank tightening moves that have crimped
investors' risk appetite.
The blue-chip CSI300 index fell 0.2 percent to
3,365.68 points, while the Shanghai Composite Index
dipped 0.1 percent to 3,153.09.
Investors were cautious after state media reported on
Tuesday that China's central bank had sent out so-called "window
guidance" to some banks urging them to control their credit
quotas starting in February.
Economists forecast China's banks extended the second
highest level of loans on record in January as worries about
policy tightening added to lenders' usual rush to sign up
higher-quality customers early in the year.
The People's Bank of China (PBOC) reaffirmed its tightening
bias by skipping open market operations for the third straight
session on Tuesday, citing a "relatively high level" of
liquidity in the banking system.
The PBOC unexpectedly raised short-term interbank rates on
Friday, though analysts do not expect it will be in any rush to
raise its benchmark policy lending rate any time soon.
"We believe strengthening financial regulation remains a
near-term downside risk to the A-share market," wrote Gao Ting,
head of China strategy at UBS Securities.
Most sectors barely moved in thin activity. Losses were led
by energy shares.
The closely watched start-up index ChiNext slid
0.6 percent, as investors took profits on a recent rally.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Kim