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China's shares ended largely flat Wednesday, as hopes for stimulus action from global central banks offset concerns about domestic economic growth.
Investors were also cautious, refraining from taking fresh positions ahead of the release next week of key economic data for June and the second quarter.
The benchmark Shanghai Composite Index, which tracks both A and B shares, ended down 0.1%, or 1.88 points, at 2227.31. The Shenzhen Composite Index fell 0.5%, or 4.60 points, to 931.65.
"China's June economic data will help shape investors' judgement on how the economy is trending," said Zhang Gang, an analyst at Central China Securities.
China's economy grew 8.1% on year in the January-March period, its worst quarterly growth rate in three years. Second-quarter data are likely to be even weaker, analysts said.
The consumer price index for June is expected to be released Monday and second-quarter gross domestic product on Friday.
Overall, trading interest remained low. On Wednesday, the turnover in Shanghai and Shenzhen fell to 115.35 billion yuan (US$18.2 billion) from CNY132.36 billion on Tuesday.
However, in the near term, the stock market is unlikely to fall as much as it did in June, when a combination of negative factors hit sentiment badly, said Mr. Zhang. The Shanghai Composite Index slid 6.2% in June because of worse-than-expected domestic economic data, tight liquidity conditions as well as the political stalemate in Greece.
Meanwhile, expectations that Beijing is going to step in with market-boosting measures will provide some support.
"Expectations for further easing of policies are growing," said Minsheng Securities analyst Zheng Ping. This could include an imminent cut in banks' reserve requirement ratio, or the amount of money commercial banks are required to hold in reserve, he said.
Tuesday, the People's Bank of China injected CNY143 billion into the money market via reverse repurchase agreements, following CNY125 billion in such operations last week.
These operations signaled the government's acknowledgment of tension in banks' liquidity conditions. The latest cut in banks' reserve ratio in May came after two consecutive weeks of reverse repos.
Energy stocks rose in active trade as revived tensions over the Iranian nuclear program pushed oil futures sharply higher overnight. Sinopec Shanghai Petrochemical rose 4.4% to CNY6.12, Oriental Energy gained 3.3% to CNY9.50 and Datong Coal climbed 2.0% to CNY10.91.
Real-estate stocks were hit by profit-taking after the official People's Daily reiterated that property controls must be kept in place as concerns over rebounding prices heighten.
China Vanke, the nation's largest property developer by sales, fell 0.2% after rising 3.0% in the past three sessions and China Merchants Property declined 0.2% after gaining 3.9% over the same period.
Cement makers, which often move in tandem with real estate stocks, were also lower. Jiangxi Wannianqing Cement slid 2.8% to CNY12.44 and Huaxin Cement declined 1.8% to CNY12.14.
