China shares ended mostly flat on Friday after the index first rose near its year-high, then pulled back amid concern over moderate turnover. The benchmark Shanghai Composite Index closed at 1,672.211 points. In the morning it climbed as high as 1,690.953, close to its year-high of 1,695.580 hit on June 2, but it came well off its intra-day peak by midday.
Turnover in Shanghai A-shares was 28.5 billion yuan ($3.6 billion), almost unchanged from Thursday's 28.9 billion. Traders were disappointed that turnover was not larger, since over 500 billion yuan of funds tied up in subscriptions to Bank of China's domestic public offer were unlocked in the second half of this week.
"Both individual and corporate investors are staying on the sidelines as there is no clear sign how the market will perform," said Xu Yinghui, analyst at Guotai Junan Securities.
But Bank of China is widely expected to surge in its listing on Wednesday - forecasts of its first-day price range from 3.4 to 4.5 yuan, versus its issue price of 3.08 yuan. Such a debut would push the market index about 1,700 points, at least for the short term, traders said.
Xiamen Engineering Machinery Co Ltd surged 9.92 percent to close at 4.21 yuan, while smaller rival Changlin Co Ltd was up 8.37 percent at 4.40 yuan. Both companies jumped their 10 percent daily limit on Thursday. Metals counters were also strong after copper and gold prices gained overnight. Shandong Gold-Mining Co Ltd rose 3.88 percent to 28.88 yuan.
A rise of the yuan to a new post-revaluation high of 7.9925 against the dollar on Friday also fuelled hopes that fresh foreign funds would enter the market.
In recent weeks foreign institutions have shown renewed interest in A-shares.
Goldman Sachs Asset Management launched a $200 million Dublin-authorised fund for such investment this month, and JF Asset Management said this week that its new A-share fund had raised $190 million days after launch. Another leg of yuan appreciation could accelerate such investment.