Mainland stock exchanges hit by disappointing factory data

Stock markets in the Chinese mainland retreated Thursday after a preliminary survey pointed to a continuing slowdown in factory activity in February.

The benchmark Shanghai Composite Index inched down by 3.77 points or 0.18 percent to 2,138.78 points on Thursday. The Shenzhen Component Index fell by 111.82 points or 1.41 percent to 7,842.12 points.

Combined turnover on the two bourses on Thursday was 298.22 billion yuan ($49.01 billion), down from Wednesday's 304.9 billion yuan.

The decline on Thursday came after worse-than-expected data for factory activity in the Markit/HSBC flash Purchasing Managers' Index (PMI) for February. The index fell to 48.3, a seven-month low and below the line of 50 that separates contraction from expansion.

Banks, brokerages and media stocks weighed on the market on Thursday while energy companies rallied.

Leading Internet firm Tencent Holdings Ltd and Sinolink Securities Co launched a low commission online financial product on Thursday. Shares in Sinolink fell by 4.40 percent to 24.11 yuan, due to investors' concerns that the low commission will result in low margins.

Sinopec, China's leading petroleum refiner and oil producer, said late on Wednesday that it will allow private capital to invest in its oil retail unit. The move, seen as an attempt to change its ownership structure and break the monopoly of State-owned enterprises, boosted investors' expectations for reforms in other State-owned oil, gas and coal companies.

The oil sector jumped by 5.62 percent on Thursday. Shares in Sinopec and mining company Taiyuan Coal Gasification Co soared by the daily limit of 10 percent to 5.17 yuan and 8.95 yuan, respectively.

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, declined by 29.24 points or 1.89 percent to 1,515.16 points on Thursday.