China stocks fall as weak recovery, lack of strong stimulus weigh

** A Reuters poll showed on Thursday that China's factory activity likely contracted for a third straight month in June, albeit at a marginally slower pace. ** Foreign investors sold a net 4.6 billion yuan ($634.63 million) of Chinese shares by the midday.

China and Hong Kong stocks fell on Thursday, weighed down by concerns about weak recovery in the world's second-largest economy and a lack of strong stimulus. ** China's blue-chip CSI300 Index declined 0.4% and the Shanghai Composite Index slipped 0.2% by the lunch recess.

** Hong Kong's benchmark Hang Seng Index dropped 1.6%, and the Hang Seng China Enterprises Index was down 1.7%. ** Other Asian markets were also subdued after global central banks reaffirmed their inflation-fighting resolve, warning rates might need to rise further.

** Real estate developers in China lost 1.3%, as investors awaited more stimulus measures for the sector. ** Shares of tourism companies fell 2%, while the food & beverage sector declined 1.4%.

** Data on Wednesday showed annual profits at China's industrial firms extended a double-digit decline in the first five months as softening demand squeezed margins, reinforcing hopes of more policy support to bolster a stuttering post-COVID economic recovery. ** A Reuters poll showed on Thursday that China's factory activity likely contracted for a third straight month in June, albeit at a marginally slower pace.

** Foreign investors sold a net 4.6 billion yuan ($634.63 million) of Chinese shares by the midday. ** Artificial intelligence stocks slipped 0.9%, extending their weekly drop to nearly 10%, as U.S. officials are considering tightening an export control rule designed to slow the flow of artificial intelligence chips to China.

** U.S. Treasury Secretary Janet Yellen said she hoped to travel to China to reestablish contact with Beijing, acknowledging there were disagreements between the two countries, MSNBC reported on Wednesday. ** The United States and China agreed to consider expanding commercial flights between the two countries to improve people-to-people contact.

** Tech giants listed in Hong Kong slumped 1.9%. ($1 = 7.2483 Chinese yuan)