China stocks slipped on Thursday as investors sold metals, mining and materials shares following weak trade data. June imports fell 8.4 percent from a year earlier, much worse than analysts' forecasts, according to data released after the market close on Wednesday. Exports also fell more than expected. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.2 percent to 3,276.76 points, while the Shanghai Composite Index lost 0.2 percent to 3,054.02.
The CSI300 materials sub-index was down 1.2 percent as the weaker June import data suggested a loss of economic momentum last month. China will report second-quarter gross domestic product on Friday morning (0200 GMT). Julia Wang, Greater China Economist at HSBC in Hong Kong, said the main surprise in China's trade data for June released on Wednesday was a weaker-than-expected drop in imports.
"Indeed, demand for commodities (coal, iron ore, crude oil, copper) have slowed across the board, both in volume as well as value terms. This suggests that the domestic industrial sector has probably slowed over the month," Wang said in a report. Overall June imports fell 8.4 percent on the year, much worse than analyst forecasts for a five percent fall and the weakest reading since April. A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.38 billion yuan. Total volume of A shares traded in Shanghai was 10.01 billion shares, while Shenzhen volume was 13.23 billion shares. Total trading volume of companies included in the HSI index was 0.6 billion shares.
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