China stocks mixed as caution grows over monetary policy outlook

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SHANGHAI, Oct 14 (Businesshala) – Shares in China were mixed on Thursday as investors became cautious about the country’s monetary policy trajectory as factory gate inflation hit record highs, while new bank loans fell short of expectations.

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** The Shanghai Composite Index was up 0.15% at 3,567.14 in the afternoon break, while the blue-chip CSI300 index was down 0.31%.

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** China’s annual factory gate prices rose at their fastest pace on record in September, driven by energy restrictions and rising commodity prices, putting pressure on businesses already grappling with supply constraints.

“We see an increasing risk of a deadlock in China as well as the rest of the world,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “The ambitious target of carbon neutrality continues to put pressure on commodity prices, which will be passed on to downstream firms.”

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** “Persistent inflationary pressures limit the potential scope for monetary policy easing,” he said.

** Some economists believe more monetary and fiscal support is needed after official data on Wednesday showed new bank loans in China accelerated in September compared with the previous month but fell short of expectations. Have become.

** The financial sub-index fell 0.9%, the consumer staples sector fell 1%, the real estate index dropped 2.71% and the health sub-index fell 2.2%.

** However, the aviation sector outperformed the market on hopes of new COVID-19 treatments, which helped improve travel demand.

** Air China Ltd gained up to 6.5%, while Shanghai International Airport, Juneau Airlines, Spring Airlines, China Southern Airlines and China Eastern Airlines also advanced.

** Merck & Company said it had applied for US emergency use authorization for its drug to treat mild to moderate patients with COVID-19, making it the first oral antiviral drug for the disease.

** Hong Kong financial markets are closed for the Chung Yeung Festival on Thursday. (Reporting by Shanghai Newsroom; Editing by Ramakrishnan M)

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