Stocks down in China

China’s stock market saw little movement on Friday as sector performances remained mixed, while investors focused on the release of consumer price data. The blue-chip CSI300 Index showed a modest gain of 0.1% during the morning session, while the Shanghai Composite Index slipped by 0.1%.

In contrast, Hong Kong stocks experienced a decline after the Bank of Canada unexpectedly raised interest rates, which reignited concerns about the possibility of higher US rates being sustained. The benchmark Hang Seng Index in Hong Kong fell by 0.4%, and the China Enterprises Index dropped by 0.8%.

Within China, the performance of various sectors varied. The real estate sector continued its rally, while media and artificial intelligence stocks lost momentum. Bank shares, however, saw an increase of 0.7% following news that major Chinese banks had reduced interest rates on yuan deposits. This move is expected to alleviate pressure on profit margins and lower lending costs.

During the Lujiazui Forum held in Shanghai, the head of China’s financial regulatory administration affirmed the country’s welcoming stance towards successful foreign institutions operating within its borders. Moreover, they stated that the overall risks within the financial sector were manageable. Additionally, Yi Huiman, Chairman of the China Securities Regulatory Commission (CSRC), emphasized the importance of robust supervision of the capital market and pledged to enhance monitoring and oversight of market trading activities.

Market participants eagerly awaited the release of May’s consumer price and factory gate price data, scheduled for Friday. A Reuters poll indicated a 0.2% increase in the Consumer Price Index (CPI), indicating ongoing weak demand.

In line with the broader Asian market sentiment, Hong Kong shares also fell, prompting a decline in tech giants listed on the Hong Kong Stock Exchange. Tech giants within the HSTECH index recorded a 1.3% decrease in their stock prices.

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