March 29, 2016 / 7:13 AM / a month ago

China stocks fall as hopes for concrete trade deal fade

SHANGHAI, Oct 16 (Reuters) - China stocks fell on Wednesday, as optimism over a concrete U.S.-China trade deal faded, with risk appetite also curbed by fresh domestic signs of economic weakness.

** The blue-chip CSI300 index closed 0.3% lower to 3,922.69, while the Shanghai Composite Index ended 0.4% down to 2,978.71.

** The market erased most of the over 1% gains on Monday, spurred by a truce between Beijing and Washington after both sides agreed to work toward a limited deal.

** But the U.S. House of Representatives on Tuesday passed four pieces of legislation, taking a hard line on China over Hong Kong’s pro-democracy movement and a legal dispute around Chinese telecom giant Huawei.

** Adding to the market worries, China’s factory gate prices declined at their fastest pace in more than three years in September as manufacturing cools on weak demand and U.S. trade pressures.

** Also, Chinese banks extended more new yuan loans than expected in September, and the country’s central bank on Wednesday injected 200 billion yuan ($28.18 billion) into the banking system via a medium-term liquidity tool.

** “Some new uncertainty in the trade front as well as earnings concerns put pressure on the market today,” said Gerry Alfonso, analyst at Shenwan Hongyuan Securities.

** Property shares are among the top performing sectors in China, as “capital injections tend to eventually flow, at least partially, to the property sector,” he added.

** But consumer stocks sank, led by top liquor maker Kweichou Moutai Co. The stock dropped 3.4% after posting worse-than-expected third-quarter results.

Reporting by Shanghai Newsroom; Editing by Rashmi Aich

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