SHANGHAI: China stocks closed down on Wednesday, after data showed the country’s consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, as government support measures set a bumpy recovery in motion for the world’s second-largest economy.
“The risk of deflation has not faded in China. Domestic demand remains weak,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
China’s economy likely grew 5.1% in the second quarter from a year earlier, according to a Reuters poll, slowing from a strong start in the first three months, due to sluggish consumer demand and keeping alive expectations Beijing will need to unleash more stimulus.
China’s new yuan loans likely more than doubled in June from May, a Reuters poll showed on Tuesday, as the central bank kept up policy support for the economy amid a shaky recovery.
At the close, the Shanghai Composite index was down 0.68% at 2,939.36.
The blue-chip CSI300 index was down 0.32%, with its financial sector sub-index higher by 0.04%, the consumer staples sector up 0.19%, the real estate index down 0.99% and the healthcare sub-index up 0.24%.
At the close of trade, the Hang Seng index was down 51.56 points or 0.29% at 17,471.67. The Hang Seng China Enterprises index fell 0.39% to 6,251.18.
The sub-index of the Hang Seng tracking energy shares dipped 3.8%, while the IT sector dipped 0.21%, the financial sector ended 0.39% higher and the property sector dipped 0.57%.
The smaller Shenzhen index ended down 0.35% and the start-up board ChiNext Composite index was weaker by 0.061%.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.19%, while Japan’s Nikkei index closed up 0.61%.
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