China stocks close lower as December lending, consumption outlook weigh

SHANGHAI: China shares closed lower on Thursday after new bank lending fell more than expected in December from the previous month, with consumption stocks leading the decline amid local COVID-19 outbreaks.

The blue-chip CSI300 index fell 1.6% to 4,765.92, while the Shanghai Composite Index lost 1.2% to 3,555.26.

Chinese banks extended 1.13 trillion yuan ($177.56 billion) in new yuan loans in December, down from 1.27 trillion yuan in November, but lending for the full year of 2021 set a record.


China's inflation rose slower than expected in December, while the country is battling with its latest outbreaks of COVID-19, with the Omicron variant detected in several cities.

"Although the Omicron outbreak and lower CPI inflation in December increase the likelihood of a slight cut in the PBoC's policy rates in the near term, we believe the space remains quite limited, and the impact of a rate cut may also be quite small, especially if the long-term LPR is not revised down," Nomura said in a note.

Consumer staples tumbled 3%, with liquor makers down 3.5% amid COVID-19 outbreaks and tightening curbs on movements between regions that clouded the outlook for the sector.

Real estate developers dropped 2.8%, as sentiment soured with more developers scrambling to negotiate new terms with their bondholders to avoid defaults.

Information technology, healthcare and semiconductor stocks lost between 1.7% and 2%.

However, energy stocks gained 1.3%, with coal miners up 1.9%.