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 per cent in July from a year earlier, versus a 0.2 per cent rise in June, the National Bureau of Statistics reported, beating a 0.3 per cent 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 per cent at 2,862.19.
The blue-chip CSI300 index was down 0.34 per cent, with its financial sector sub-index higher by 0.07 per cent, the consumer staples sector down 0.23 per cent, the real estate index up 1.67 per cent and the healthcare sub-index down 1.63 per cent.
At the close of trade, the Hang Seng index was up 198.40 points or 1.17 per cent at 17,090.23. The Hang Seng China Enterprises index rose 1.29 per cent to 6,017.85.
For the week, the CSI 300 fell 1.6 per cent, while the Hang Seng edged up 0.9 per cent.
The smaller Shenzhen index ended down 0.66 per cent and the start-up board ChiNext Composite index was weaker by 0.985 per cent.
The sub-index of the Hang Seng tracking energy shares rose 1.2 per cent, while the IT sector rose 1.35 per cent, the financial sector ended 1.16 per cent higher and the property sector rose 1.61 per cent.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.75 per cent, while Japan’s Nikkei index closed up 0.56 per cent.
