SHANGHAI: Shanghai stocks took a breather on Friday after rising for seven sessions in a row as profit-taking pressure grew.
But Chinese equities are set for their biggest weekly gain in two months, and analysts expect the upward trend to continue, aided by a strengthening yuan.
The Shanghai Composite Index fell 0.2% by the lunch break following a seven-day rising streak.
China’s blue-chip CSI300 Index was flat.
Private fund manager Rabbit Fund expects China stocks to zig-zag higher as the economy slowly recovers. Analysts also expect the market to benefit from a strengthening yuan, which on Thursday registered its strongest official close in 2-1/2 years.
The currency appreciation “is expected to whet foreign appetite for yuan assets, push up valuations and increase interbank liquidity,” Huatai Securities said.
The brokerage expects the yuan to reach 6.82 per dollar by the end of next year, which is nearly 3% stronger than the current level.
Gold miners jumped as prices of the yellow metal surged to a record high in early Asian trading on Friday.
Steelmakers rose after China on Friday said it will continue to regulate crude steel output and prohibit the addition of illegal new capacity from 2026 to 2030.
Expectations of Beijing’s broader crackdown on oversupply and disorderly competition boosted shares in the metal sector .
But tech stocks, including chip-makers and consumer electronics firms, dropped on profit-taking after strong gains recently.
Sichuan Swellfun Co shares slumped 3% after the spirit maker denied media reports of a potential acquisition by a rival company.
The Hong Kong stock market is closed on Friday for a public holiday.
Comments