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China stocks dip on industrial profit slowdown, weaker Yuan

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China stocks edged lower on Thursday, reversing some losses in the morning session, while investors remained cautious in the face of slowing industrial profit growth, persistent Yuan weakness, and growing concerns over tighter liquidity.

The blue-chip CSI300 index fell 0.3 per cent, to 3,345.70, while the Shanghai Composite Index lost 0.1 pct to 3,112.35 points.

Investor confidence in China’s economic recovery was shaken by fresh data showing profits in China’s industrial firms grew 7.7 per cent in September, slowing sharply from the previous month’s 19.5 per cent pace as several sectors were affected by weak activity.

Profits in industries such as electronics, steel and electricity were hit by a significant drop in growth, reinforcing suspicions that recent economic stability was the result of government stimulus and could be short-lived.

Further hurting sentiment, China’s offshore Yuan slipped to fresh six-year low on Thursday after the People’s Bank of China set a weaker midpoint.

Paul

The author Paul