Chinese shares slumped as sentiment was dampened by official data showing weak factory activity in July.

The Shanghai Composite Index fell 1.2%, or 42.51 points, to finish Thursday's trade at 3,573.21. The Shenzhen Component Index lost 1.7%, or 193.26 points, to 11,009.77.

China's manufacturing purchasing managers' index or PMI slipped by 0.4 of a percentage point to 49.3 in July, according to data from the National Bureau of Statistics.

The figures were attributed to a decline in some of its major sub-indices, particularly production and new orders, highlighting weak demand amid the upcoming expiry of the trade truce with the US. No new trade resolution was made after the two-day meeting in Stockholm, raising concerns that the tariffs will hike again as the tariff reprieve expires on Aug. 12.

In corporate news, Hisense Home Appliances Group's (HKG:0921, SHE:000921) Shenzhen shares dropped 5.6% despite its first-half attributable net profit rising 3% year on year to 2.08 billion yuan and its revenue increasing 1.4% to 49.3 billion yuan.

China Yangtze Power (SHA:600900) declined by 3% despite its first-half attributable profit rising 14% to almost 13 billion yuan and its total operating revenue climbing 5% to 36.6 billion yuan year on year.

Yonghui Superstores (SHA:601933) also fell 3% amid plans to raise 3.99 billion yuan from a share placement plan, with the proceeds to be mostly used for upgrading stores and logistics projects.