SHANGHAI: China stocks slumped to a one-month low on Wednesday with the Shanghai benchmark dropping below the psychologically key 3000-point mark as the yuan weakened and strong selling by foreign investors weighed on the market.

Foreign investors sold a net 7.2 billion yuan ($996.00 million) of Chinese shares via Stock Connect during the day, logging the biggest daily outflow since mid January.

The broad Asian markets lacked direction as investors wait for Friday’s release of US core inflation data.

The market weakened even after data showed on Wednesday that China’s industrial firms posted higher profits in the opening months of the year, as overall gains remain tempered by the persistent fragility in China’s property market, pointing to a divergence in the country’s post-pandemic recovery.

At the close, the Shanghai Composite index was down 1.26% at 2,993.14, and the blue-chip CSI300 index was down 1.16%. Both indexes closed at nearly one-month low levels.

The financial sector sub-index was lower by 0.42%, and the consumer staples sector closed down 0.96%, while the real estate index dropped 2.74% and the healthcare sub-index lost 1.1%.

The smaller Shenzhen index ended down 2.8% and the start-up board ChiNext Composite index was weaker by 2.808%.

The Hang Seng index was down 225.48 points, or 1.36%, to 16,392.84. The Hang Seng China Enterprises index fell 1.67% to 5,728.13.

The Hang Seng sub-index tracking energy shares dipped 0.8%, while the IT sector dipped 1.11%. The financial sector ended 1.49% lower and the property sector dipped 0.13%.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.35%, while Japan’s Nikkei index closed up 0.9%.