SHANGHAI: Chinese stocks closed down on Thursday dragged by liquor companies’ shares, as investors remained worried about macroeconomic factors despite a survey showing that services activity expanded at the quickest pace in five months.

China’s blue-chip CSI 300 Index ended 0.9% lower, while the Shanghai Composite Index lost 0.4%.

Hong Kong benchmark Hang Seng Index was roughly flat.

China’s services activity in December expanded at the fastest pace in five months, thanks to a solid rise in new business, a private-sector survey showed.

However, this encouraging data alone is unlikely to significantly lift market sentiment given the broad macro weakness in the property sector and consumer prices, UBS analysts said in a note.

Liquor stocks fell 2.3% and led declines, with Luzhou Laojiao and Kweichou Moutai down 3.3% and 1.5%, respectively.

Foreign capital recorded a net outflow of 3.9 billion yuan ($545.47 million) via the northbound trading link.

Global long-only funds offloaded Chinese equities at the fastest pace in 2023 last month, as they rushed to meet redemption requests and to diversify away from the world’s second-largest economy, according to Morgan Stanley analysts.

Hong Kong-listed tech stocks reversed some losses in the afternoon session, closing up 0.2%.

Alibaba rose 1.0%, compared to a 2.5% increase in its American depositary receipts traded in New York.

Meanwhile, shares of Meituan and Tencent both declined 0.6%.