China stocks mixed, weak banks offset gains in consumer shares
SHANGHAI, June 11 (Reuters) - China's stock market closed mixed on Thursday, as continuous weakness in banking shares offset gains in consumer plays after Beijing unveiled new measures to promote consumption.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.1 percent, to 5,306.59, while the Shanghai Composite Index gained 0.3 percent, to 5,121.59 points.
Late on Wednesday, China's state council, or cabinet, vowed to liberalise the consumer credit market, and support cross-border e-commerce. The news lent support to consumer and IT stocks.
But the market gave a mute response to Beijing's other measures, aimed at expanding fiscal spending.
The state council encouraged local governments to maximise spending this year or face cuts to their 2016 budgets.
Separately, China's finance ministry said it has approved a second batch of local government debt swaps worth 1 trillion yuan ($161.2 billion), doubling the size of the existing swap program announced in March.
Those measures would potentially improve lenders' asset quality, but banking stocks remained weak, weighed down by MSCI's decision not to include mainland stocks in its emerging market benchmark index.
The sector was seen as potentially a major beneficiary if MSCI had decided to include mainland shares.
Bank of China shares fell 2.7 percent. Its branch in the affluent Zhejiang province is falling far short of its profit target, three sources told Reuters, highlighting the difficulties faced by lenders as soured loans erode profit in a cooling economy. (Reporting by Samuel Shen and Pete Sweeeney; Editing by Jacqueline Wong)
© Thomson Reuters 2017 All rights reserved.