China shares dip as distillers lead consumer slump | Reuters

China’s main equity gauges fell on Wednesday with consumer firms dragging the market lower, as investors continued to worry that strong economic data could lead to possible policy tightening.

** At the close, the Shanghai Composite index was down 0.1% at 3,479.63. ** The blue-chip CSI300 index was down 0.71%, with the consumer staples sector down 3.01% after rallying nearly 6.5% last week. The financial sector sub-index slid 0.39%, and the healthcare sub-index lost 0.29%. ** The three biggest drags on the CSI300 index were all distillers. Kweichow Moutai Co Ltd dropped 3.06%, Wuliangye Yibin Co Ltd fell 4.89% and Luzhou Laojiao Co Ltd dropped 6.11%. ** The smaller Shenzhen index ended down 0.36% and the start-up board ChiNext Composite index was weaker by 0.862%. ** Foreign investors were slight net sellers of A-shares on Wednesday, with Refinitiv data indicating outflows from the Shanghai Stock Exchange via the Stock Connect programme through Hong Kong. ** Analysts say that strong economic data could prompt authorities to tighten policy, putting pressure on equity valuations. ** “We can’t rule out the possibility that policymakers may move as early as late this year to tighten monetary policy, potentially triggering knock-on effects in both the real economy and financial markets,” Christina Zhu, economist at Moody’s Analytics said in a note. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.27%, while Japan’s Nikkei index closed up 0.12%. ** At 07:21 GMT, the yuan was quoted at 6.5434 per U.S. dollar, 0.04% weaker than the previous close of 6.5409. ** So far this year, the Shanghai stock index is up 0.2% and the CSI300 has fallen 2.1%, while China’s H-share index listed in Hong Kong is up 3%. Shanghai stocks have risen 1.1% this month. (Reporting by Andrew Galbraith; Editing by Shailesh Kuber)

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