China stocks recovered from earlier losses to end higher on Friday, as gains in healthcare shares offset losses in consumer stocks, and as market participants continued to watch the developments of China-US trade spat. The blue-chip CSI300 index ended flat at 3,756.88 points, while the Shanghai Composite Index edged up 0.2 percent at 3,082.23.
For the week, CSI300 slipped 0.1 percent, while SSEC gained 0.3 percent. China is open to negotiating with the United States to resolve trade tensions, Premier Li Keqiang was quoted as saying by state media late on Thursday, noting that the countries should manage their conflicts through dialogue. US President Donald Trump's top economic adviser Larry Kudlow said on Thursday he hoped upcoming trade talks with China would yield progress, but that resolving US complaints would be "a long process." In a sign of increasing headwinds for the world's second-largest economy as policy makers navigate debt risks and a heated trade row with the United States, profit growth at Chinese industrial firms slowed to its weakest pace in over a year in March. Chinese fund managers remained cautious as they cut equity exposure for the next three months to a 19-month low, on worries over the economy amid trade war fears.
Sentiment was further curbed by the recent sell-off in some leading blue chips, including Inner Mongolia Yili Industrial and Gree Electric Appliances posting single-day sharp losses. However, there is hope that the imminent MSCI inclusion would help breathe life into the country's stock market.
Overseas investors are pumping billions of dollars into Chinese stocks and the country's asset managers are rushing to launch index-tracking funds in a fervent build-up to China's inclusion in MSCI's widely tracked equity benchmarks. Analysts estimate that will initially trigger $20 billion in foreign inflows, mainly from passive investors who need to adjust their portfolios to avoid deviations from their benchmarks.
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