China stocks closed lower on Wednesday as mixed signals from economic data added to investors' uncertainty over prospects for further policy stimulus this year. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.3 percent to 3,237.61 points, while the Shanghai Composite Index lost 0.3 percent to 3,027.90. Volumes were weak for the second day in a row, with only 13.8 billion shares trading hands in Shanghai.
The economy grew slightly more than expected in the second-quarter, but exports remained weak and private investment growth shrank to a record low, data on Friday showed. An official survey released on Monday showed home price rises in China slowed in June for a second straight month, adding to fears that a construction-led rebound in the economy may not be sustainable.
Finance shares were lower but real estate shares including Vanke, currently embroiled in a hostile take-over battle, rose. The CSI300 financial sub-index was down 0.2 percent, while the Shanghai Composite property sub-index was up 0.1 percent. Analysts say equities are stuck in a holding pattern as the market awaits more information following a series of mixed economic indicators released over the past week on growth, inflation and housing. The next possible clues about the economic outlook may come from the Purchasing Managers' Indexes, due August 1.
"I think it's normal, there's been some recent data releases including inflation, and there's also the Vanke situation which is naturally impacting the market a bit," said Zhang Qi, analyst at Haitong Securities in Shanghai. "You've also seen banking shares do relatively well recently, so it's not a surprise to see a bit of a pull back." Volumes were weak for the second day in a row, with the total volume of A shares traded in Shanghai at 7.01 billion shares. Volumes in Shenzhen were 11.03 billion shares. Analysts say that the Shanghai Composite will struggle to break much above 3,000 without some strong signs of fundamental improvements in economy or earnings.