China stocks dipped on Thursday as investors turned their focus back to the struggling economy after a brief bargain hunting spree in the previous session.
China’s blue-chip CSI300 index fell 0.1 per cent to 3,111.95 points by the lunch break, while the Shanghai Composite Index was unchanged at 2,887.09.
Hong Kong shares slumped roughly 2 percent as fears of a possible British vote to exit from the European Union next outweighed relief after the US Federal Reserve struck a more cautious note on interest rates.
UBS strategist Lu Wenjie said fears of further weakness in the yuan were also discouraging investors.
On Wednesday, the yuan briefly hit a more than five-year low against the dollar as the greenback firmed amid growing fears that Britain may vote to leave the EU in the June 23 referendum.
There was little market reaction to the latest data showing China’s new yuan loans in May beat forecasts but money supply growth slowed. Like other May data in recent weeks, the figures pointed to areas of both strength and weakness.
Although there are signs that China is cranking up state spending on infrastructure to support economic growth – several highway and railway projects have been approved this week – there are rising concerns of a delay in state sector reforms.
Most sectors, including infrastructure, fell in China.
Bucking the trend, resources shares rose on news that China will strictly control newly added production capacity in the non-ferrous metals sector and accelerate a reduction of overcapacity in the sector.
Investors were more upbeat on small-caps, with Shenzhen’s start-up board up 0.7 per cent.