Chinese stocks closed lower on Thursday following weaker-than-expected consumer inflation data.

The benchmark Shanghai Composite Index ended down 0.74 percent, at 3,216.75 points. The smaller Shenzhen index closed 0.74 percent lower at 10,421.06 points.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, lost 0.54 percent to close at 1,953.94 points.

Combined turnover rose to 471 billion yuan (about 68.3 billion U.S. dollars) on Thursday from 455.7 billion yuan the previous trading day.

Official data showed China's consumer inflation eased sharply in February after price distortions created by the festival season faded, leaving the central bank with leeway on interest rate policy.

The consumer price index (CPI), a main gauge of inflation, advanced 0.8 percent year on year in February, well below the market expectation of 1.7 percent, and substantially lower than January's 2.5-percent growth.

However, the country's producer price index (PPI), which measures costs of goods at the factory gate, unexpectedly rose 7.8 percent year on year in February to its highest level since 2008, largely as a result of government measures to trim excessive industrial capacity.

Continued weakness in the yuan also dampened investor confidence. It is the yuan's third consecutive daily weakening in response to a stronger U.S. dollar following the Federal Reserve hinting that it could raise interest rates as soon as this month.

CSSC Science & technology Co., Ltd. dropped 5.3 percent to 20.72 yuan. North Huajin Chemical Industries Co., Ltd. lost 4.49 percent to 12.34 yuan.

Shares of artificial intelligence rose in defiance of the overall trend with Shenzhen Sunwin Intelligent Co., Ltd. rising by the daily limit of 10 percent to 20.02 yuan.