China's main stock index slipped 0.45 percent on Friday as investors saw chances rising for an interest rate hike after comments from the central bank governor that the government may move to rein in the fast-growing economy.
The Shanghai Composite Index ended at 4,030.258 points, clinging above the psychologically key 4,000 mark after dipping in the afternoon to 3,999.165 points.
Gainers barely outnumbered losers by 418 to 412. Turnover in Shanghai A shares was heavy at 166.3 billion yuan, but down from Thursday's 181 billion. Central bank governor Thou Xiaochuan said late on Thursday that China might consider taking further steps to cool the economy by raising interest rates or banks' reserve requirements.
But an interest rate hike would not be sufficient to sway the market a great deal, said GUI Homing, analyst at Shyness & Wang Securities. He added that the authorities were unlikely to take more extreme measures because there were no obvious signs of a bubble in the market. "Of course, on Thursday's news had some influence on today's performance of the market," GUI said. "But the market is still in good condition.
Despite on Friday's slip and a sell-off on Tuesday that saw the Shanghai index's third-biggest point drop this year, the index was little changed from the week before and is up 50 percent since the start of the year.
State media on Friday noted modest signs of cooling: Only 240,000 new A-share stock accounts were opened on Wednesday, compared with an average of 300,000 per day around the time of the May 1-7 holiday.
The pace of establishing new funds also slowed, with only three funds launched or in the process of being launched so far this month. The finance and insurance sector, which would be particularly affected by an interest rate hike, led on Friday's decline.
China Ping an Insurance (Group) Co dropped 1.03 percent to 62.20 yuan and China Life Insurance Co fell 0.18 percent to 39.02 yuan. Property Company Vanke moved up 0.42 percent to 16.60 yuan.
China's National Bureau of Statistics on Friday issued the property outlook index for April, which rose to 102.65 from 101.22 in March. Industrial metals prices tumbled on Thursday, with copper dropping to a six-week low and dragging down the overall metals market on signs of oversupply in China. Yunnan Aluminium Co fell 2.29 percent to 15.26 yuan and Bait Aluminium slid 1.86 percent to 20.02 yuan. Government sources said China would also raise export taxes by 5 to 10 percent on a range of products, including steel, to slow down its export boom and ease its huge trade surplus, although this did little to dent steel stocks on Friday. Baoshan Iron & Steel, China's biggest steel mill, rose 0.31 percent to 13.01 yuan and Panzhihua Steel surged 4.26 percent to 12.73 yuan after hitting a record high of 13.38 yuan.
Shanghai Xinhua Media Co Ltd climbed 6.56 percent to 38.68 yuan and Beijing Ghetto CATV Network Co Ltd was up 2.72 percent at 24.59 yuan, after China's biggest online advertising company, US-listed Focus Media Holding Ltd, said on Thursday that quarterly net profit rose 73 percent amid rapid growth in the country's advertising market.