SHANGHAI: China stocks closed down on Friday, after an official factory survey showed the country’s manufacturing activity unexpectedly contracted in May, while traders were also cautious ahead of a key US inflation report later in the day.
China’s official purchasing managers’ index (PMI) fell to 49.5 in May from 50.4 in April, below the 50-mark separating growth from contraction and missing a median forecast of 50.4 in a Reuters poll.
The soft outcome kept alive calls for fresh stimulus as a protracted property crisis continues to weigh on businesses, consumers and investors.
At the close, the Shanghai Composite index was down 0.16% at 3,086.81.
The blue-chip CSI300 index was down 0.4%, with its financial sector sub-index lower by 0.01%, the consumer staples sector down 0.19%, the real estate index down 0.26% and the healthcare sub-index down 0.58%.
The Hang Seng index was down 150.58 points or 0.83% at 18,079.61. The Hang Seng China Enterprises index fell 1.09% to 6,392.58.
For the week, the CSI300 slipped 0.6%, while the Hang Seng fell 2.8%.
Also denting sentiment, Nikkei reported that Tencent Holdings has been asked by China’s regulators to lower the mobile payment market share of its ubiquitous WeChat app, raising investor concerns of renewed regulatory crackdown on the tech sector.
Tencent shares declined 2.2%, while the Hang Seng Tech Index dropped 1.7%.
Investors also awaited the Personal Consumption Expenditures (PCE) price index - the Federal Reserve’s preferred price measure - due later on Friday for more clues on US rate cut paces.
The sub-index of the Hang Seng tracking energy shares rose 1.1%, while the IT sector dipped 1.99%, the financial sector ended 0.12% lower and the property sector dipped 2%.
The smaller Shenzhen index ended up 0.21% and the start-up board ChiNext Composite index was weaker by 0.444%.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.45%, while Japan’s Nikkei index closed up 1.14%.
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