China stocks shed losses, encouraged by factory surveys

China stocks recovered from early losses and ended Friday roughly flat, as investors weighed the impact from Standard & Poor's downgrade of China's credit outlook and a surprise pick-up in March manufacturing activity. China's bluechip CSI300 index rose 0.1 percent, to 3,221.89, while the Shanghai Composite Index gained 0.2 percent, to 3,009.53 points. For the week, CSI300 was up 0.8 pct while the SSEC was 1 percent higher.
Late on Thursday, rating agency S&P downgraded its outlook for China's sovereign credit rating to negative from stable, saying the government's reform agenda is on track but likely to proceed more slowly than expected. The news helped drive a more than 1 percent drop in stocks in morning trading, but the market recovered in the afternoon. China released the official Purchasing Managers' Index (PMI) on Friday morning, which showed activity in China's manufacturing activity unexpectedly expanded in March for the first time in nine months, offering some signs that the economy is improving.