Shanghai shares ease as data shows soft growth in Oct bank loans

Shanghai shares ended lower on Thursday after data showed that the country's new bank loans last month fell more than expected to their lowest in a year on tightened loan quotas.

The blue-chip CSI300 index rose 0.1% to 4,908.46, while the Shanghai Composite Index slipped 0.1% to 3,338.

The tech-heavy start-up board ChiNext rose 0.7%, while the STAR50 index climbed 1.3%.

Lenders issued 689.8 billion yuan ($104.22 billion) in new yuan loans last month, data from the People's Bank of China (PBOC) showed, down from 1.9 trillion yuan in September and well short of analysts' expectations for 800 billion yuan.

"We think credit growth will remain strong in the near-term," Julian Evans-Pritchard, senior economist - China at Capital Economics, wrote in a note.

"Admittedly, bank lending has started to slow which we think will continue in the coming months given that loan quotas are now being tightened. But appetite for bond and equity issuance among private firms is picking up as confidence in the outlook has returned."

Banking shares retreated, with the CSI300 banks index ending down 1.1%.

Following a recent sharp drop in high-flying tech firms and other new economy stocks, there were signs of a shift towards cyclical players after Monday's encouraging late-stage coronavirus vaccine trial data from Pfizer Inc and BioNTech.

"The good news of the vaccine progress significantly boosted investors' confidence in global economic recovery, which in particular could benefit cyclical and old economy companies," analysts at CMB International noted in a report.

There will be some profit-taking pressure for new economy shares whose valuation premium over old ones hit at least 20-year highs, the brokerage added.