Shares in China extended losses on Friday for their worst week since February, as Sino-US trade fears continue to cast gloom over markets, while a vaccine scandal undermined confidence in consumer and healthcare firms, amid a slow domestic growth rate. At the close, the Shanghai Composite index was down 26.94 points or 1 percent at 2,768.02. For the week, the index lost 4.6 percent, its worst performance since early February.
The blue-chip CSI300 index was down 1.65 percent. It lost 5.9 percent for the week. The financial sector sub-index closed down 0.46 percent, the consumer staples sector ended 2.1 percent lower, the real estate index ended down 1.8 percent and healthcare sub-index closed 3.34 percent lower. China's services sector expanded at the weakest pace in four months in July, as there was the least growth in new business since December 2015, a private survey showed on Friday.
On Friday, a high-level government body said China must balance steady economic growth and risk prevention at a time when external uncertainties are increasing, and more attention needs to be paid to the "transmission" of monetary policy. Some analysts also believe consumer firms are suffering from a "crisis of confidence" spreading from healthcare firms after a recent vaccine safety scandal sparked widespread anger and prompted investors to cut their exposure.
China vowed to retaliate if the United States acted on a threat to raise tariffs on the Asian nation's exports, fuelling fears in financial markets that the trade war between the world's two biggest economies would escalate. The smaller Shenzhen index ended down 1.72 percent and the start-up board ChiNext Composite index was weaker by 1.89 percent.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.05 percent, while Japan's Nikkei index closed 0.06 percent firmer. The largest percentage gainers in the main Shanghai Composite index were Hunan Huasheng Co Ltd, which closed up 10.07 percent, followed by Taiyuan Chemical Industry Co Ltd, which ended 10.05 percent firmer and Shanghai Highly Group Co Ltd, which closed up 10.02 percent.
The largest percentage losses in the Shanghai index were Shanghai Feilo Acoustics Co Ltd, which ended down 10.05 percent, followed by Suzhou Institute of Building Science Group Co Ltd, which closed 10 percent lower and Autobio Diagnostics Co Ltd, which ended down 9.99 percent. So far this year, the Shanghai stock index is down 17.1 percent, the CSI300 dropped 17.8 percent, while China's H-share index listed in Hong Kong is down 9 percent. Shanghai stocks have declined 4.7 percent this month.
About 12.70 billion shares were traded on the Shanghai exchange, roughly 92.5 percent of the market's 30-day moving average of 13.73 billion shares a day. The volume in the previous trading session was 17.42 billion. The price-to-earnings ratio of the Shanghai index was 12.07, as of last full trading day, while the dividend yield was 2.7 percent. So far this week, the market capitalisation of the Shanghai stock index has fallen by 3.63 percent to 29.35 trillion yuan.
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