1st LD: China's new yuan loans up in October

China's new yuan-denominated lending in October hit 514 billion yuan (around 80.6 billion U.S. dollars), up 48 billion yuan from a year earlier, official data showed on Thursday.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.5 percent year on year to 136 trillion yuan at the end of October, the People's Bank of China (PBOC) said in a statement on its website.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 14 percent year on year to 37.6 trillion yuan at the end of last month, the statement said.

However, a significant decrease was seen in loans to home buyers and enterprises, said HSBC analyst Qu Hongbin, who attributed that mainly to sluggish domestic demand and a rising risk aversion mindset among banks.

More easing policies are necessary to protect against the increasing deflation risk, Qu said.

Social financing, funds that non-financial firms and households get from the financial system, increased by 476.7 billion yuan in October, down 177 billion yuan from a year earlier, according to the PBOC statement.

China's consumer price index (CPI), the main gauge of inflation, grew 1.3 percent year on year in October, slowed from the 1.6-percent gain in September and 2 percent in August. On a monthly basis, consumer prices edged down 0.3 percent.

Meanwhile, China's producer price index (PPI), which measures wholesale inflation, plunged 5.9 percent year on year last month, marking the 44th straight month of decline and pointing to continuing weak market demand. Endi