SHANGHAI: China shares closed lower on Thursday after new bank lending fell more than expected in December from the previous month, with consumption stocks leading the decline amid local COVID-19 outbreaks.
The blue-chip CSI300 index fell 1.6% to 4,765.92, while the Shanghai Composite Index lost 1.2% to 3,555.26.
** Chinese banks extended 1.13 trillion yuan ($177.56 billion) in new yuan loans in December, down from 1.27 trillion yuan in November, but lending for the full year of 2021 set a record.
China stocks fall after weak Dec lending data; property, consumption drop
** China's inflation rose slower than expected in December, while the country is battling with its latest outbreaks of COVID-19, with the Omicron variant detected in several cities.
** "Although the Omicron outbreak and lower CPI inflation in December increase the likelihood of a slight cut in the PBoC's policy rates in the near term, we believe the space remains quite limited, and the impact of a rate cut may also be quite small, especially if the long-term LPR is not revised down," Nomura said in a note.
** Consumer staples tumbled 3%, with liquor makers down 3.5% amid COVID-19 outbreaks and tightening curbs on movements between regions that clouded the outlook for the sector.
** Real estate developers dropped 2.8%, as sentiment soured with more developers scrambling to negotiate new terms with their bondholders to avoid defaults.
** Information technology, healthcare and semiconductor stocks lost between 1.7% and 2%.
** However, energy stocks gained 1.3%, with coal miners up 1.9%.
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