SHANGHAI: China stocks ended lower on Friday, with foreign funds halting their buying spree after nearly one month of net inflows, as investors examined China’s economic recovery after an expectation-led shares rally.

China’s blue-chip CSI 300 Index closed down 1%, while the Shanghai Composite Index lost 0.7%.

The Hang Seng Index declined 1.4% and the Hang Seng China Enterprises Index dropped 1.6%.

For the week, the CSI 300 lost 1%, and the Hang Seng tumbled 4.5% to log the biggest weekly decline since end-October.

Foreign money snapped a buying streak since Jan. 4, selling a net 4.2 billion yuan ($622.74 million) of Chinese shares via the Stock Connect Scheme on Friday.

Meanwhile, there are no clear signs of domestic incremental money flowing into the market yet, Industrial Securities wrote in a note.

“There are louder voices that a correction would happen after a January surge in the market,” said Bohai Securities analysts. “Index-wise, we are entering an observation stage in the near term to examine the recovery and more policies.” China’s stock benchmark jumped 7.4% last month on bets of China’s strong rebound in holiday spending.

Bohai analysts added future upside depends on a fundamental recovery, especially in the consumption and property sectors.

Market liquidity also tightened marginally after the Lunar New Year holidays, with the country’s central bank draining 720 billion yuan via open market operations this week.

Shares in real estate developers, new energy firms and automobiles declined more than 1.5% each to lead the decline.

Tech giants listed in Hong Kong also lost 1.3%.

In a bright spot, China’s services activity in January expanded for the first time in five months as spending and travel got a boost from the lifting of stringent COVID curbs, sending business confidence to near 12-year highs, a private sector survey showed on Friday.