China: Stocks fall on revived US rate expectations; property shares firm

[SHANGHAI] China's benchmark stock index closed at the lowest level in 2-1/2 months on Wednesday, after comments from Federal Reserve officials rekindled prospects of a US interest rate rise as early as June.

The Shanghai Composite Index lost 1.3 per cent, to 2,807.51 points, the lowest closing since March 1. The blue-chip CSI300 index fell 0.6 per cent, to 3,068.04.

Sentiment in China had already been weak in recent months amid concerns that signs of recovery in its economy may be short-lived and worries that policymakers are growing more cautious about providing additional stimulus as bad debts mount.

Confidence was further hit on Wednesday by overnight weakness on the Wall Street, after strong US consumer prices and other economic data added to the case for a rate increase soon.

Most sectors fell, but real estate shares bucked the broader market downdraft, rising 0.6 per cent after encouraging home price data.

REUTERS