Shanghai shares end at two-month low as traders gauge lacklustre data

SHANGHAI: Mainland China and Hong Kong stocks ended lower on Monday, with the key benchmark closing at its lowest level in more than two months, dented by a flurry of weaker-than-expected data that showed the property sector remains a key drag on the economy.

China’s central bank left a key policy rate unchanged, as expected, when rolling over maturing medium-term loans, and drained some funds from the banking system.

The Asian country’s May industrial output lagged expectations and a crisis in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth, though retail sales beat forecasts due to a holiday boost.

China’s new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, with the property sector struggling to find a bottom despite government efforts to rein in oversupply and support debt-laden developers.

Data on Friday showed new bank lending in China rebounded far less than expected in May and some key money gauges hit record lows, suggesting the world’s second-largest economy is still struggling for footing.

At the close, the Shanghai Composite index was down 0.55% at 3,015.89 points, the lowest close since April 16.

The blue-chip CSI300 index was down 0.15% at 3,536.20 points.

The session’s losses were led by weakness in the real estate sector. A sub-index tracking the industry closed 2.6% lower.

The smaller Shenzhen index ended flat for the day and the start-up board ChiNext Composite index was higher by 0.8%.

At the close of trade, the Hang Seng index was flat at 17,936.12 points. The Hang Seng China Enterprises index was also roughly flat at 6,373.48 points.

The sub-index of the Hang Seng, tracking energy shares, dipped 1.6% and the property sector slipped 0.7%.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.2%, while Japan’s Nikkei index closed 1.8% lower.

The yuan was quoted at 7.2560 per U.S. dollar, as of 0809 GMT, compared with the previous close of 7.2557. – Reuters