China's main stock indexes were largely unchanged on Tuesday, after data showed the country's inflation picked up to multi-year highs and reinforced a shift by Beijing to a more tighter policy stance. The blue-chip CSI300 index was unchanged at 3,435.80 points, while the Shanghai Composite Index was also flat at 3,217.93 points.
China's consumer inflation rate in January grew the most since May 2014 compared with the previous year, and its producer price index rose the fastest since August 2011, both beating market expectations and adding to signs of economic recovery.
Still, Capital Economics analysts cautioned in a research note that both indexes would peak soon and "hopes for a sustained reflation in China will be disappointed." While higher inflationary impulse would reinforce a recent shift by authorities a to tighter policy stance, which is unfavourable for equities, any signs that demand-led inflation might peak also presents hurdles to riskier assets because of the negative implications for wider growth.
Major insurance stocks slid, with China Life shedding 1 percent, as insurance sector's premium income growth is expected to slow in 2017 on tighter regulations. Most sectors edged lower, while gains were led by material shares.
An index tracking major non-ferrous metals producers rose 1 percent to close at a 2-month high. The index was up for the 7th straight session. Shares of Leshi Internet rose 3.7 percent, as Jia Yueting, founder and controlling shareholder of the company proposed awarding 20 new shares for every 10 shares held by all investors.
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