SHANGHAI: China stocks closed lower on Friday, even after data showed the country’s consumer prices increased at a faster-than-expected rate in July, as analysts highlighted that demand remains sluggish.
Asian shares were trying to end a tough week on a high note after Wall Street bounced following data that showed US jobless claims fell more than expected last week, while Japanese stocks fought to sustain an early rally.
China’s consumer price index (CPI) edged up 0.5% in July from a year earlier, versus a 0.2% rise in June, the National Bureau of Statistics reported, beating a 0.3% increase in a Reuters poll of economists.
“Conditions are in place to see inflation trend a little higher in the coming months but it should not impede further monetary easing,” said Lynn Song, chief economist of Greater China at ING.
“With low inflation and weak credit activity, domestic factors continue to favour further monetary policy easing. We continue to look for at least one more rate cut this year with the potential for more if global rate cuts accelerate.”
At the close, the Shanghai Composite index was down 0.27% at 2,862.19.
The blue-chip CSI300 index was down 0.34%, with its financial sector sub-index higher by 0.07%, the consumer staples sector down 0.23%, the real estate index up 1.67% and the healthcare sub-index down 1.63%.
At the close of trade, the Hang Seng index was up 198.40 points or 1.17% at 17,090.23. The Hang Seng China Enterprises index rose 1.29% to 6,017.85.
For the week, the CSI 300 fell 1.6%, while the Hang Seng edged up 0.9%.
The smaller Shenzhen index ended down 0.66% and the start-up board ChiNext Composite index was weaker by 0.985%.
The sub-index of the Hang Seng tracking energy shares rose 1.2%, while the IT sector rose 1.35%, the financial sector ended 1.16% higher and the property sector rose 1.61%.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.75%, while Japan’s Nikkei index closed up 0.56%.
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