SHANGHAI: Chinese blue-chip stocks closed lower on Friday as shares of real-estate developers retreated from a buying frenzy in the previous session fanned by bets on policy easing in the property sector.

The blue-chip CSI300 index ended 0.2% lower at 4,888.37, while the Shanghai Composite Index rose 0.2% to 3,539.10 points.

For the week, the Shanghai Composite index added 1.4%, its biggest weekly gain in two months. The CSI300 index rose 1%, gaining the most in five weeks.

Real-estate firms dropped 2.3%, a day after posting their best session in nearly seven years on a slew of positive signals for policy easing in the sector.

Bankers and analysts, however, said China will stand firm on policies to curb excess borrowing by property developers even as it makes financing tweaks to help home buyers and meet “reasonable” demand amid an industry liquidity crunch.

There is little evidence that rules to contain a debt build-up in the sector will be pared back.

“We do not expect systemic risk from the property market, although it could remain a near-term concern ahead of December/January offshore bond redemption season,” Morgan Stanley said in a note.

High-end equipment manufacturers and defence stocks gained 2.9% and 3.8%, respectively.

Citic Securities said in a note that the boom in the defence sector may become a “new normal”.