Shares in mainland China fell more than 5 per cent yesterday, the biggest one-day drop in more than four years, as investors sold bank stocks ahead of expected new listings and took profits after a strong recent rally.

Investors absorbed the announcement on Tuesday that Bank of China, the country's second largest lender, plans to raise up to Rmb20bn from a listing on the Shanghai stock exchange later this year in what could be the first of several fund-raisings by banks and other large companies.