Markets dip on July manufacturing data

Chinese mainland stock markets dipped Wednesday following indications that manufacturing activity in July slowed.

HSBC's preliminary China purchasing managers' index (PMI) came out at 47.7 for July, lower than June's 48.2 and the lowest point in 11 months. A score of below 50 indicates a contraction in the manufacturing sector.

The disappointing data, released right after trading started in Shanghai, chilled trading, as did news that China Merchants Bank gained approval to issue 3.07 billion A-shares on the Shanghai Stock Exchange.

The Shanghai Composite Index dropped in the early session, but picked up a little in the afternoon. Analysts said that, despite the weak PMI data, investors were buoyed by Chinese Premier Li Keqiang's recent remarks that the government will fine-tune its policies to maintain GDP growth of at least 7 percent.

The Shanghai Composite Index finished 0.52 percent lower, closing at 2,033.33 points; while the Shenzhen Component Index fell 0.35 percent to 7,935.85 points.

The ChiNext board increased 2.1 percent, passing the 1,200-point line for the first time this year.

Trading was active, with combined turnover of the two exchanges at 225.1 billion yuan ($36,7 billion), about 5 billion yuan up from Tuesday.

IT, media and entertainment, and pharmaceutical sectors were up, while real estate and financial stocks fell.