Chinese shares fell on Tuesday after data showed banks extended fewer-than-expected new loans in July. The Shanghai Composite index closed down 0.6% at 2,797.26, while the blue-chip CSI300 index ended 0.9% lower. CSI300's with financial sector sub-index was lower by 1.4%, the consumer staples sector was down 0.5%, the real estate index fell 1.1% and the healthcare sub-index declined 0.2%.
The smaller Shenzhen index ended down 0.7% and the start-up board ChiNext Composite index was weaker by 1%. Chinese banks extended 1.06 trillion yuan ($150.06 billion) in new yuan loans in July, down from June and falling short of analysts' expectations, according to data released by the People's Bank of China on Monday.
Analysts expect Beijing to allow more easing to energise growth. "Investors we spoke to are not yet convinced that announced easing measures will raise consumption and investments," UBS China strategist Wendy Liu said in a note on Tuesday. The Swiss bank toned down its China 2019 GDP growth forecast to 6.1% from 6.2% previously. The PBOC lowered its official yuan midpoint for the ninth straight day to a fresh 11-year low on Tuesday to reflect broad weakness in the local unit.
The largest percentage losers on the Shanghai index were Xiangpiaopiao Food Co Ltd down 7.8%, followed by Shanghai Shine-Link International Logistics Co Ltd losing 5.9% and Ningbo United Group Co Ltd down by 5.8%. So far this year, the Shanghai stock index is up 12.2% and the CSI300 has risen 21.8%. But, Shanghai stocks have declined 4.6% this month. ** About 13.09 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 13.16 billion.
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