China’s main stock benchmark entered a bear-market Friday, following a deep afternoon selloff that dragged markets in the rest of the region lower. The Shanghai Composite Index fell 3.6% to 2900.97. The index has fallen 20% from its recent high, the definition of a bear market, reached on Dec. 22. Traders and analysts attributed the sharp selloff to a Chinese state-run media outlet’s report that some Chinese banks were no longer accepting stocks as collateral for loans. The Chinese bank regulator didn’t immediately return a call for comment. The prospect that liquidity could be drying up raised concerns among already-nervous investors about the outlook for the market, despite a rebound the previous day. If banks have stopped accepting loans as collateral “it will further tighten liquidity in the market and create panic selling,” said Steven Leung, director at UOB Kay Hian in Hong Kong. “The news is very confusing.” […]