China shares drop 1.1 pct, property moves hit banks

SHANGHAI, April 22 (Reuters) - China's key stock index closed down 1.1 percent on Thursday, led by banks on deepening worries that Beijing's clampdown on the surging property sector would curb lending.

The Shanghai Composite Index .SSEC finished the day at 2,999.484 points, after jumping 1.8 percent on Wednesday, the largest percentage gain in three months.

All banks listed on the Shanghai and Shenzhen stock exchanges fell, while the sector occupied the top four spots on the day's list of most actively traded stocks.

Concerns about policies to cool property prices pushed the index to two-month lows early this week.

Industrial and Commercial Bank of China (601398.SS) fell 1.5 percent, Minsheng Bank (600016.SS) fell 2.7 percent, Construction Bank (601939.SS) fell 3.0 percent, Merchants Bank (600036.SS) fell 3.3 percent and Bank of Communications (601328.SS) fell 4.9 percent.

"Banking stocks are falling today because of stricter regulations on bank loans," said Xu Yinhui, analyst at Guotai Junan Securities.

"Policy tightening in the property sector has a definite impact on the banking sector. People may be wondering how much it is going to affect loans."

Losing Shanghai stocks outnumbered gainers by 504 to 376, while turnover rose to 153 billion yuan ($22.41 billion) from Wednesday's 146 billion yuan. ($1=6.827 Yuan) (Reporting by Farah Master; Editing by Edmund Klamann)