Mainland stocks break longest rally in 11 months

Overbought markets 'take breather', more gains to depend on cash flow

SHANGHAI - Mainland stocks fell for the first time in eight days, led by material and agriculture producers, on concern that this month's rally that drove the benchmark index to a bull market was excessive relative to the outlook for earnings.

Yanzhou Coal Mining Co slid 6.1 percent, snapping an eight-day, 58 percent gain. Gansu Dunhuang Seed Co led declines among agriculture producers and smaller-company stocks after cotton and corn prices dropped on speculation that investors are trimming their bets on further gains. Citic Securities Co and Haitong Securities Co led advances among brokerages on speculation that higher stock trading volumes will boost revenue. "The markets are overbought and are taking a breather after the post-holiday gains," Zhou Xi, a strategist at Bohai Securities Co, said. "There's a good chance the liquidity-driven rally will continue as sentiment is good."