Stocks barley move as policy concerns grow

Thursday’s stocks in the Chinese mainland were little changed on persistent fears that policy tightening measures will soon start to weigh on the country’s economic growth, despite largely resilient data reported the previous day.

The blue- chip CSI300 index fell 0.18 percent, to 3,528.79 points, while the Shanghai Composite Index added 0.06 percent to 3,132.49 points.

The Shanghai SE 50 Index, an index tracking the 50 most representative blue- chips in Shanghai, lost 0.6 percent after slumping the most in six months since the previous session.

But the tech- heavy start- up board index ChiNext rose 1.43 percent to a one- month high.

Data on Wednesday showed solid industrial output and retail sales growth in May, though investment is starting to cool as credit conditions tighten in the world’s second- largest economy.

Though China didn’t follow the US Federal Reserve in raising rates, as it did with short- term rates in March, analysts pointed out that borrowing costs in the country’s interbank market have already risen sharply this year, as money supply in May grew at the slowest annual rate in over 20 years.

“We’re seeing more equity supplies but less liquidity, so China’s stock market will likely remain sluggish,” said Wei Jianfei, analyst at Lianchu Securities.

Traders say the market is also worried that profit growth at listed Chinese firms could stagnate, as producer price inflation may have peaked.

Most sectors fell for the day, led by banking and consumer stocks.