SHANGHAI: China stocks fell in thin trading on Friday, ahead of a week-long holiday, while Hong Kong shares sank following a tech-led selloff on Wall Street.
China’s blue-chip CSI300 Index and the Shanghai Composite Index ended down 1.3 percent.
In Hong Kong, Hang Seng dropped 1.7 percent to a one-week low.
Many have left trading rooms for the nine-day Chinese Lunar New Year festival kicking off on February 15. Mainland markets will be shut next week, while Hong Kong will be closed from Tuesday to Thursday.
Trading typically thins ahead of the Spring Festival holiday, but China’s stock market has held “at a relatively high level” without pulling back, Topsperity Securities said in a report, concluding that a strengthening yuan is lending support.
The yuan is set for its longest weekly winning streak in 13 years, aided by a weak dollar and resilient Chinese exports.
China’s consumer-related stocks rose as investors bet they will likely benefit from holiday spending.
Chipmakers also gained as investors expect more Chinese breakthroughs in artificial intelligence.
The mainland market was also anchored by signs of improvement in Sino-US relations after the Trump administration shelved several key tech security measures aimed at Beijing ahead of an April meeting between the two countries’ presidents.
But sentiment in Hong Kong was spoiled after major US stock indexes fell sharply on Thursday as technology shares slid and investors were cautious ahead of US inflation data on Friday.
Most sectors fell in Hong Kong.
Material stocks tumbled as gold and silver prices slumped again.
Energy stocks also dropped sharply as oil prices sank.
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