China banks (continued)

See yesterday's post as well...

HONG KONG (MarketWatch) -- Chinese shares closed sharply lower Wednesday as the benchmark Shanghai Composite Index fell 5% to close at 3,266.43 on disappointing Chinese corporate profits, and falling commodity prices and fears of possible central bank moves to tighten lending.

The loss erased most of the gains made over the previous five sessions, and marked the Shanghai index's biggest percentage drop since Nov. 18, when it tumbled 6.3%. Daily volume hit a record 302.81 billion yuan ($44.3 billion).

As the drop in Shanghai become more pronounced in the afternoon, other Asian markets including Hong Kong and Mumbai fell, with the Hang Seng Index ending down 2.4%. The Sensex had recently given up 1.3% in afternoon trading.

Francis Lun, general manager at Fulbright Securities, said the Chinese markets tumbled from "an unattainable level because of hot money, and there are fears the central government will act to cool the markets."