SHANGHAI: China stocks tracked regional markets lower on Wednesday, while the yuan also weakened to a fresh seven-month low on hawkish comments from Federal Reserve officials, with investors bracing for a key US inflation reading later this week.
Sentiment also remained negative due to subdued economic fundamentals and mild stimulus policies. The US dollar strengthened overnight, bolstered by hawkish comments from Federal Reserve officials as well as data showing a stable US housing market, both suggesting that the central bank will not be in a rush to kickstart its rate-cutting cycle.
Traders are eagerly awaiting Friday’s release of the US personal consumption expenditures (PCE) price index - the Fed’s preferred measure of inflation - with economists polled by Reuters expecting the annual growth to ease to 2.6% in May.
Bucking the trend, shares of some artificial intelligence (AI) firms rose. Chinese AI companies are moving swiftly to attract users of OpenAI’s technology, following reports the US firm plans to restrict access in China and other countries to its application programming interface (API), a platform that allows developers of other products to integrate its AI models.
At the midday break, the Shanghai Composite index was down 0.32% at 2,940.59 points. China’s blue-chip CSI300 index was down 0.25%, with its financial sector sub-index higher by 0.04%, the consumer staples sector down 0.2%, the real estate index down 1.8% and the healthcare sub-index down 0.35%.
Chinese H-shares listed in Hong Kong rose 0.01% to 6,465.2, while the Hang Seng Index was down 0.02% at 18,069.75. The smaller Shenzhen index was up 0.12%, the start-up board ChiNext Composite index was higher by 0.45% and Shanghai’s tech-focused STAR50 index was down 0.32%. Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.05% while Japan’s Nikkei index was up 1.29%.
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