China's inflation eased a touch to 5.3 percent in the year to April from a 32-month high of 5.4 percent in March but was still higher than expected, keeping the door open for more tightening steps.

The price data, along with those on money supply and bank credit published on Wednesday, offered tentative signs that the government was making some headway in taming inflation.

The government has been treading cautiously to curb price rises without undermining growth in the world's second-largest economy.

The April data is quite mixed as industrial production weakened but investment activities remained strong. From an overall view, the economic situation is still relatively hot, said Shao Yu, economist with Hongyuan Securities in Shanghai.

The April economic indicators make it less likely that the central bank will raise required reserve ratios or interest rates. I believe the central bank will, at most, raise reserve requirements once in the coming two months.

China's industrial output in April missed expectations with a slight slowdown to 13.4 percent year-on-year from a 14.8 percent pace in March, the National Bureau of Statistics said.

Economists polled by Reuters had forecast a 5.2 percent rise in the consumer price index and a 14.7 percent increase in industrial output.

Chinese banks extended 739.6 billion yuan ($113.9 billion) in local currency loans in April, more than market forecasts for 700 billion yuan, the People's Bank of China said on Wednesday.

Yuan loans outstanding at the end of April were 17.5 percent higher than a year earlier, the central bank said.

Though far too soon for Beijing to declare victory in its battle against inflation, the stabilization of prices suggested that tighter monetary policy was beginning to produce initial results.

The government has a target of 4 percent annual inflation, but some analysts said it could be tough to achieve that goal given increasing labor costs and rising commodity and fuel prices.

The central bank has raised interest rates four times since October. It has also raised banks' reserve requirements seven times, locking up a record 20.5 percent of deposits for big banks that could otherwise become loans.

(Reporting by Aileen Wang, Kevin Yao and Simon Rabinovitch; Editing by Ken Wills)

China Inflation