At the close, the Shanghai Composite index was down 0.07 per cent at 3,588.78, while blue-chip CSI300 index was up 0.11 per cent after falling as much as 0.62 per cent earlier.
Among the worst-performing sectors, the industrial sub-index dropped 1.53 per cent and the energy sub-index lost 0.74 per cent .
Data showed China’s factory activity expanded at a softer pace in June, as the resurgence of COVID-19 cases in the export province of Guangdong and supply chain woes drove output growth to the lowest in 15 months.
The manufacturing sector has gradually returned to normal but challenges linger, said Wang Zhe, senior economist at Caixin Insight Group.
In a bright spot, the real estate sector and banking sector rose by 4.32 per cent and 1.96 per cent , respectively and lifted blue-chip shares.
Investors remained wary on lofty valuations of certain sectors.
“The fundamentals of the new energy auto makers and supply chain companies are strong, but investors including us have some valuation concerns,” said Wang Qi, CEO at MegaTrust Investment (HK).
Investors are keenly watching out for 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 smaller Shenzhen index ended down 0.83 per cent and the start-up board ChiNext Composite index was weaker by 0.63 per cent .
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.35 per cent , while Japan’s Nikkei index closed down 0.29 per cent .
Hong Kong’s stock market is closed on Thursday for the Hong Kong Special Administrative Region Establishment Day.
