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China shares fall as Beijing stands pat on benchmark lending rate

* SSEC -0.5%, CSI300 -0.51%, HSI -1.19%

* Chine leaves loan prime rate steady at July fixing

* Evergrande shares, bonds continue to slump

SHANGHAI, July 20 (Reuters) - China shares fell on Tuesday as investors adopted risk-off mode after Beijing kept a benchmark lending rate unchanged despite growing expectations for a cut, while developer Evergrande slumped after local authorities halted some of its sales. ** At the midday break, the Shanghai Composite index was down 0.5% at 3,521.57 points. ** China’s blue-chip CSI300 index was down 0.51%, with its financial sector sub-index slipping 0.96%.

** Policymakers kept the one-year loan prime rate (LPR) at 3.85%. The five-year LPR remained at 4.65%. The rate was unchanged for the 15th straight month, despite growing expectations for a cut after a surprise lowering of bank reserve requirements. ** The real-estate index dropped 1.73% as concerns around Hong Kong-listed China Evergrande Group dented risk sentiment. ** Sales in two Evergrande developments in a southern Chinese city have been halted by the authorities, government notices showed, adding pressure on the developer’s cashflow that has raised concerns in the past few months. ** Evergrande’s shares plunged 14.37% in Hong Kong, and bond and share prices of related companies also tumbled. ** Chinese H-shares listed in Hong Kong fell 1.47% to 9,811.8, while the Hang Seng Index was down 1.19% at 27,163.88. ** The sub-index of the Hang Seng index tracking property firms fell 1%, energy companies slumped 3.6%, and the IT sector fell 1.3%. ** The smaller Shenzhen index was down 0.38%, the start-up board ChiNext Composite index was weaker by 0.21%, and Shanghai’s tech-focused STAR50 index was flat. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.95%, while Japan’s Nikkei index was down 0.96%. ** The yuan was quoted at 6.4881 per U.S. dollar, 0.04% firmer than the previous close of 6.4905. (Reporting by Shanghai Newsroom, Editing by Sherry Jacob-Phillips)

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