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 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.

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 close, the Shanghai Composite index was down 0.22% at 2,932.39.

The blue-chip CSI300 index was down 0.66%, with its financial sector sub-index lower by 0.09%, the consumer staples sector down 2.27%, the real estate index fell 3.12% and the healthcare sub-index declined 0.86%.

The smaller Shenzhen index ended down 0.53% and the start-up board ChiNext Composite index was weaker by 1.31%.

At the close of trade, the Hang Seng index was down 39.64 points or 0.23% at 17,304.96. The Hang Seng China Enterprises index fell 0.34% to 6,086.4.

The sub-index of the Hang Seng tracking energy shares rose 0.7%, while the IT sector rose 0.02%, the financial sector ended 0.83% lower and the property sector dipped 0.21%.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.38%, while Japan’s Nikkei index closed down 2.49%.