SHANGHAI: China stocks fell on Friday and registered a second week of losses as investors eyed more policy tonic from Beijing to shore up the economy.
At the close, the Shanghai Composite index weakened 0.06% to 3,368.07, while the blue-chip CSI 300 index lost 0.45%. Both gauges saw a second week of decline.
The Hang Seng index dropped 0.2% at close, bringing the loss this week to 1.3%.
Energy shares led the fall, after state refining giant Sinopec said China’s oil consumption is set to peak by 2027.
The consumer staples sector lost 0.99% and the healthcare sub-index lost 0.28%.
China’s policy-triggered bull run that started in late September has lost steam as economic fundamentals have yet to turn the corner amid looming US tariff risks.
China left its benchmark lending rates unchanged as expected at the monthly fixing on Friday. Persistent deflationary pressure and tepid credit demand call for more stimulus to aid the broad economy, but narrowing interest margins on the back of fast falling yields and a weakening yuan limit the scope for immediate monetary easing.
The 2025 budget deficit and mix are more positive than expected and suggest Beijing is willing to set a high growth target and record fiscal budget to boost market confidence, but further policy details are unlikely before March, Morgan Stanley said in a note.
Still, the benchmark CSI 300 index has climbed 16% so far this year and is set to end a three-year losing streak.
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