China stocks flat as tech rally runs into uneven economic data
- The blue-chip CSI300 index was up 0.1%
HONG KONG: China stocks were nearly unchanged on Tuesday, as a tech-driven rally ran into headwinds from mixed economic data, with weak consumer spending and a slump in the property sector.
The Shanghai Composite index briefly strengthened past the 4,100 level in morning trade, before trimming gains to 0.06% at 4,098.85 by the noon trading break.
The blue-chip CSI300 index was up 0.1%. Tech shares joined a regional rally, with the STAR50 Index gaining 0.5% and the info tech sector index adding 1.5%.
Among other winners, the rare earth sector jumped nearly 4% and the new energy index was up 2.9%.
However, gains were tempered after data showed increasing unevenness in China’s economy last month, with retail sales falling for the first time in over three years and investment slumping, while industrial output picked up pace.
Meanwhile, new home prices fell at a slightly faster pace in May, official data showed on Tuesday, as the crisis-hit property sector continued to grapple with fragile demand. Consumer staples sector weakened 1.5% and real estate index was down 2.4%.
“Consumer confidence remains quite soft in China, as wage growth slows and household balance sheets continue to be impacted by the property price downturn,” said Lynn Song, chief economist for Greater China at ING.
“Given the prominent role of boosting domestic demand in China’s Five-Year Plan, more measures to boost consumption could be rolled out moving forward.”
In Hong Kong, the benchmark Hang Seng Index weakened 1.3% from a 10-day high seen on Monday.
The Hang Seng Tech Index was down 1.6%.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.4% on news of a US-Iran peace deal. Japan’s Nikkei index added 0.8% to a fresh record high after BOJ hiked rates as expected.