China stocks weakened on Thursday as investors took profits following a sharp rally in the previous two days, falling in step with regional markets led lower by Wall Street. There were few signs of panic in the retreat. Chinese Premier Li Keqiang reassured global markets on Wednesday that Beijing can keep its economy on track and stock markets in check.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1.2 percent, to 3,357.56, while the Shanghai Composite Index lost 1.5 percent, to 3,197.89 points. The session was dominated by some profit taking after the market posted a combined 5 percent gain during the previous two days, analysts said. There were also signs of investors deleveraging.
Major stock markets in the region fell, with Japan's Nikkei index falling over 2 percent, while the Taiwan market lost 0.2 percent. Inflation data published on Thursday showed persistent weakness in producer prices in August, analysts said, but it had little impact on the market. Banking shares ended the session up, outperforming the market. Small-caps fell, with Shenzhen's growth board ChiNext down 1.4 percent. Brokerages underperformed, impacted by forecasts for lower trading volumes.
Analyst said August inflation data published on Thursday, which shows persistent weakness in producer prices, had little impact on the market. "Relatively calm morning session dominated by some profit taking after the recent rally in the market," Gerry Alfonso, director of Shenwan Hongyuan Securities Co, wrote about mainland exchanges. "The economic figures were mixed and had a relatively small impact on the market."
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