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China shares down 3.80% at midday

Chinese shares tumbled 3.80 percent by the break on Tuesday, extending the previous day's hefty losses as dealers fret over a liquidity crisis in the country's banking system that has squeezed lenders. The benchmark Shanghai Composite Index dived 74.56 points to 1,888.68, following a 5.30 percent dive on Monday. Investors have been spooked as cash dries up and the interbank rate -- the interest banks charge to lend to each other -- has jumped, raising fears they will cut back on loans, which would in turn drag on the economy.

China shares have best day in two weeks, give Hong Kong a boost

* HSI +0.4 pct, H-shares +0.8 pct, CSI300 +3.1 pct * HSI stymied again at resistance at May 2011 high * China banks, brokers gain on policy cues * China Cosco hammered after profit warning By Clement Tan HONG KONG, Jan 28 (Reuters) - China shares jumped to their best day in two weeks on Monday, sparking Hong Kong gains, as investors welcomed comments by a senior central bank official seen as a tacit admission that bank profits need to be protected.
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