SHANGHAI: China stocks gave up early gains to close lower on Friday as losses in tech firms offset optimism due to the rebound in November industrial profits, though major indexes posted a fourth straight weekly gain.
The blue-chip CSI300 index closed 0.1 per cent lower at 4,022.03, while the Shanghai Composite Index shed 0.1 per cent to 3,005.04. Both indexes rose as much as 1 per cent during the session.
For the week, CSI300 rose 0.1 per cent, while SSEC was slightly up.
Profits at industrial firms in November grew at the fastest pace in eight months, breaking a three-month declining streak, as production and sales quickened, but broad weakness in domestic demand remains a risk for earnings next year.
“Although the profit growth turned to positive in November, we have to see that the current downward pressure on the economy is still big, and the volatility and uncertainty of profit growth still exist due to multiple factors such as market demand and industrial prices,” Zhu Hong, an official with the statistics bureau, said in a statement released along with the data.
For the day, the tech-heavy start-up board ChiNextP slid 1.5 per cent and snapped a three-week rising streak.
Investors needed to exercise caution as the benchmark Shanghai index approached the 3,000-point level, a key resistance since early-May, as the short-term economic recovery actually was not that good, China Fortune Securities’ analyst Yan Kaiwen said.
Given the robust rally in the A-share market this year, institutional investors tended to pocket gains as the year ended rather than increase exposure, Yan added.
Last weekend, a state fund announced plans to cut its stakes in some tech companies, triggering a sharp correction in the sector.
On the trade front, China said it was in close contact with the United States on signing a “Phase 1” trade deal and that both sides were still going through necessary procedures before the signing.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.69 per cent, while Japan’s Nikkei index fell 0.36 per cent.
The yuan was quoted at 6.9992 per U.S. dollar, 0.02 per cent weaker than the previous close of 6.998.
By 0716 GMT, China’s A-shares were trading at a premium of 25.17 per cent over the Hong Kong-listed H-shares.
Source: Economic Times