SHANGHAI, Aug 31 (Reuters) - Shanghai stocks eased on Thursday as investors took a breather after a recent rally, but scored their third straight month of gains thanks to robust corporate earnings that led fund managers to boost their equity exposure.
The blue-chip CSI300 index fell 0.3 percent, to 3,822.09 points, while the Shanghai Composite Index shed 0.1 percent to 3,360.81 points.
For the month, CSI300 rose 2.3 percent, while the SSEC advanced 2.7 percent, notching their fourth and third straight month of gains, respectively.
Chinese fund managers boosted their suggested equity exposure for the next three months as major indexes pierced key resistance and market sentiment picked up on further signs of an expanding economy, a monthly Reuters poll showed.
"There's fundamental support for SSEC to rise further above 3,300 points, but there needs to be adequate consolidation," Gui Haoming, analyst at Shenwan Hongyuan Securities, wrote in his latest market commentary.
The recent market rally was bolstered by strong corporate earnings, but Gui says more catalysts are needed to build on the gains.
For the day, investors largely ignored a survey showing growth in China's manufacturing sector unexpectedly accelerated in August, with some analysts questioning whether such a trend is sustainable.
"The latest official PMI readings suggest that China's manufacturing activity may have strengthened in August but point to weaker momentum in the rest of the economy," wrote Julian Evans-Pritchard, China economist at Capital Economics.
"Looking ahead, if we are right to believe that tighter policy will continue to weigh on investment spending in the coming quarters, then we doubt that the current pace of industrial output growth can be sustained for long."
Indeed, interbank rates have been trending higher, reflecting tighter liquidity conditions as banks brace for quarterly regulatory scrutiny at the end of next month.
Most sectors fell on Thursday, led infrastructure and banking plays, which fell 1.1 percent, as investors pocketed gains, judging newly-published, strong results from China's biggest lenders have been fully priced in. (Reporting by Luoyan Liu and John Ruwitch; Editing by Shri Navaratnam)