SHANGHAI: China stocks fell on Wednesday, extending losses from the previous session following disappointing economic data for April, prompting some economists to downgrade the country’s growth forecasts.

China’s blue-chip CSI300 Index closed down 0.5%, while the Shanghai Composite Index lost 0.2%.

Hong Kong’s benchmark Hang Seng Index slumped 2.1%, while the China Enterprises Index dropped 2.3 percent.

Other Asian shares were subdued and the dollar hovered around a five-week peak as investors remained risk-averse, with the US debt ceiling talks and a mixed set of economic data weighing on sentiment.

China’s April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter and intensifying pressure on policymakers to shore up a wobbly post-COVID recovery.

Barclays economists cut China’s 2023 GDP forecast to 5.3% from 5.6% previously on “concerns around the sustainability of the recovery in housing and consumption”.

“Beijing may have to introduce a new round of supportive measures in the second half of the year, including cutting benchmark lending rates to bolster growth,” said Ting Lu, chief China economist at Nomura.

Insurance stocks declined 2.4%, while non-ferrous metal and liquor shares retreated 0.8% and 1.1%, respectively.

At the other end, aerospace defence companies advanced 2.4% and communications equipment stocks added 1.8%.

In Hong Kong market, tech giants declined 2.2%, healthcare firms plunged 3.9%, and mainland property developers tumbled 4.6%.

China’s new home prices rose for the fourth straight month in April but at a slower pace, heightening fears that pent-up demand after the country’s economic reopening is fading.