China stocks track regional markets lower on US rate concerns

SHANGHAI, June 26 (Reuters) – China stocks tracked
regional markets lower on Wednesday, while the yuan also
weakened to a fresh seven-month low on hawkish comments from
Federal Reserve officials, with investors bracing for a key U.S.
inflation reading later this week.

Sentiment also remained negative due to subdued economic
fundamentals and mild stimulus policies.

The U.S. dollar strengthened overnight, bolstered by hawkish
comments from Federal Reserve officials as well as data showing
a stable U.S. housing market, both suggesting that the central
bank will not be in a rush to kickstart its rate-cutting cycle.

Traders are eagerly awaiting Friday’s release of the U.S.
personal consumption expenditures (PCE) price index – the Fed’s
preferred measure of inflation – with economists polled by
Reuters expecting the annual growth to ease to 2.6% in May.

Bucking the trend, shares of some artificial intelligence
(AI) firms rose. Chinese AI companies are moving swiftly to
attract users of OpenAI’s technology, following reports the U.S.
firm plans to restrict access in China and other countries to
its application programming interface (API), a platform that
allows developers of other products to integrate its AI models.

** At the midday break, the Shanghai Composite index
was down 0.32% at 2,940.59 points.

** China’s blue-chip CSI300 index was down 0.25%,
with its financial sector sub-index higher by 0.04%,
the consumer staples sector down 0.2%, the real
estate index down 1.8% and the healthcare sub-index
down 0.35%.

** Chinese H-shares listed in Hong Kong rose 0.01%
to 6,465.2, while the Hang Seng Index was down 0.02% at
18,069.75.

** The smaller Shenzhen index was up 0.12%, the
start-up board ChiNext Composite index was higher by
0.45% and Shanghai’s tech-focused STAR50 index was
down 0.32%.

** Around the region, MSCI’s Asia ex-Japan stock index
was weaker by 0.05% while Japan’s Nikkei index
was up 1.29%.

(Reporting by Shanghai Newsroom; Editing by Janane Venkatraman
)