Market ends win streak on bank liquidity woes

Chinese stocks fell, driving the benchmark index to its biggest loss in almost three months, on concern the nation's banks will sell more shares to replenish capital depleted by record loan growth. The Shanghai Composite Index dropped 3.5 percent to 3223.53, the most since Aug 31 and sliding from a three-month high.

China's five largest banks submitted preliminary plans for raising capital to the industry regulator, according to four people with knowledge of the matter. The nation's 11 largest publicly traded banks may need to raise about 300 billion yuan by selling shares and bonds to ensure they have adequate capital for continued loan growth, BNP Paribas said last week.

"Should so many big banks propose to raise capital, that will be a big blow to investors' confidence as it will hurt the market's liquidity," said Li Jun, a strategist at Central China Securities Holdings Co.