China shares fall to 3-week low on fears of lower bank profits after new Basel capital rules

China shares hit 3-week low on bank profit fears

SHANGHAI — Chinese shares fell to a three-week low on fears bank profits might be hurt by new international capital adequacy rules.

The benchmark Shanghai Composite Index lost 50.04 points, or 1.9 percent, to 2,602.46, the lowest close since Aug 25. The Shenzhen Composite Index for China’s smaller second exchange dropped 2.2 percent to 1,156.51.

Investors worry China’s banks might be required to set aside more reserves for bad loans under the new international standards announced this week by the Basel-based Bank for International Settlements, analysts said.

“Banks might face renewed pressure to sell shares,” said Peng Yunliang, an analyst for Shanghai Securities.

Bank of China Ltd., China Construction Bank Ltd., and Agricultural Bank of China Ltd. all fell about 2 percent — BOC to 3.63 yuan, CCB to 4.52 yuan, and ABC to 2.63 yuan.

Resource producers lost ground after commodity prices fell. China Petroleum and Chemical Corp., known as Sinopec, slipped 2.2 percent to 8.07 yuan, while Yunan Copper Ltd. plunged by 6.1 percent to 20.73 yuan.

Real estate shares also fell. Poly Real Estate Group lost 1.9 percent to 10.94 yuan, while rival China Vanke dropped 1.6 percent to 8.03 yuan.

In currency markets, the yuan strengthened to 6.7314 to the U.S. dollar from Wednesday’s close of 6.7371.