SHANGHAI: China stocks fell on Thursday, following the biggest one-day gain in five months in the previous session, as a private sector survey showed the country’s manufacturing activity in July shrank for the first time in nine months, while a weakening yuan also dented investor sentiment.

The Caixin/S&P Global manufacturing PMI fell to 49.8 in July from 51.8 in the previous month, the lowest reading since October last year and missing analysts’ forecasts of 51.5.

The reading, which mostly covers smaller, export-oriented firms, was in line with an official PMI survey on Wednesday that showed manufacturing activity slipped to a five-month low.

China stocks track Asian markets higher

Beyond that, Ting Lu, chief China economist at Nomura, said China’s property sector is set to drop further in the second half of 2024.

He cited data from the China Real Estate Information Corporation that contract sales volumes for top 100 developers declined 22.7% year-on-year in July against a 22.4% fall in June, despite the low base.

• At the midday break, the Shanghai Composite index was down 0.22% at 2,932.14 points.

• China’s blue-chip CSI300 index was down 0.57%, with its financial sector sub-index higher by 0.03%, the consumer staples sector down 2.2%, the real estate index down 2.25% and the healthcare sub-index down 1.03%.

• Chinese H-shares listed in Hong Kong fell 0.37% to 6,084.36, while the Hang Seng Index was down 0.19% at 17,311.49.

• The smaller Shenzhen index was down 0.63%, the start-up board ChiNext Composite index was weaker by 1.33% and Shanghai’s tech-focused STAR50 index was down 0.83%.

• Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.70% while Japan’s Nikkei index was down 2.67%.

• The yuan was quoted at 7.2295 per US dollar, 0.04% weaker than the previous close of 7.2265.