SHANGHAI: China stocks closed down on Thursday, erasing gains in early trade, as credit data showed domestic demand remained weak, while Hong Kong shares tracked global markets higher on a dovish tone from the US Federal Reserve.
** The blue-chip CSI 300 Index ended 0.5% lower, while the Shanghai Composite Index finished down 0.3%.
** Hong Kong’s Hang Seng Index rose 1.1%, and the Hang Seng China Enterprises Index advanced 0.4%.
** Asian stocks broadly rallied, after the Fed flagged the end of its tightening cycle and struck a dovish tone for the year ahead.
** The Fed left interest rates unchanged on Wednesday and US central bank chief Jerome Powell said its historic tightening of monetary policy is likely over with inflation falling faster than expected.
** China stocks underperformed the MSCI’s broadest index of Asia-Pacific shares outside Japan, which added 1.9%, underscoring investors’ concerns about the country’s sluggish recovery.
** New bank lending in China jumped less than expected in November, even as the central bank keeps policy accommodative to support a feeble recovery in the world’s second-largest economy.
** “November’s credit and money data were modestly disappointing, and the composition of credit and loans data continued to show sluggish credit demand,” Goldman Sachs said in a note.
China stocks decline as policy signals fail to cheer investors
** “We continue to expect further monetary policy easing (including more RRR cuts and policy rate cuts) in light of deflationary pressures, soft credit demand and weak sentiment,” Goldman Sachs added.
** In mainland markets, shares in real estate and liquor makers lost roughly 1% and 2%, respectively.
** In Hong Kong, tech giants added 0.3%, and mainland developers advanced 1.2%.
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