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Staff of Reuters 3 Minutes to Read (Reuters) – BEIJING, July 1 (Reuters) – After statistics showing tepid manufacturing activity in June stoked fears about an economic rebound, China’s stock market fell on Thursday, followed by losses in industrial and material sectors. ** The Shanghai Composite index was down 0.07 percent at 3,588.55 points at lunchtime, while the blue-chip CSI300 index was down 0.23 percent. ** The industrial sub-index was down 1.11 percent, while the material sub-index was down 0.8 percent. ** Factory activity in China grew at a slower pace in June, according to data, as the reappearance of COVID-19 cases in the export province of Guangdong, as well as supply chain issues, drove output growth to its lowest level in 15 months. According to Wang Zhe, senior economist at Caixin Insight Group, the manufacturing industry has increasingly returned to normal, but obstacles remain. “The low base effect from last year will wane in the second half of this year. Inflationary pressure, combined with the slowing economy, remains a major challenge for China.” ** The consumer staples sector was down 0.38 percent in the morning session, with home-grown beer brand Tsingtao Brewery Co leading the way with a nearly 2% drop.** The smaller Shenzhen index was down 0.74 percent, the start-up board ChiNext Composite index was down 0.46 percent, and Shanghai’s tech-focused STAR50 index was down 0.59 percent. On Thursday, shares of new energy vehicle companies fell as well. “The fundamentals of new energy vehicle companies and the supply chain sector are strong, but investors, including ourselves, have some valuation concerns,” said Wang Qi, CEO of MegaTrust Investment. **Investors are closely watching the upcoming first-half earnings season, which will largely determine the market outlook and sentiment for the rest of the year, Wang Qi added. The stock market in Hong Kong is closed on Thursday in observance of Hong Kong Special Administrative Region Establishment Day. MSCI’s Asia ex-Japan stock index was down 0.26 percent in the region, while Japan’s Nikkei index was down 0.52 percent. (Cheng Leng, Luoyan Liu, and Andrew Galbraith contributed reporting; Amy Caren Daniel edited the piece.)/nRead More

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