HONG KONG: China stocks dipped on Friday, pausing their rally as investors locked in gains ahead of a Politburo meeting expected to set economic policy for the rest of the year, though markets still registered a fifth straight weekly rise.
The Shanghai Composite index fell 0.3% to 3,593.66, slipping from a 3-1/2-year high. China’s blue-chip CSI300 index lost 0.5%.
Liquor distillers dropped 2% and consumer staples slid 1.7%, leading declines onshore. Offsetting some losses, the AI sector jumped 2.2% and semiconductor sector climbed 1.9%.
Despite the day’s pullback, the Shanghai Composite index has gained 1.7% so far this week to log its fifth straight weekly gain - its longest winning streak since the start of a rally that began in February 2024.
Beijing’s latest efforts to curb excessive competition and overcapacity, and incremental signs of improving US-China trade relations lifted sentiment.
Analysts at CLSA said institutional investors’ overall risk appetite has improved significantly this month, though some remain unconvinced about a structural bull run and see more sector-specific opportunities.
Hong Kong’s benchmark Hang Seng Index weakened 1.1% to 25,388.35 after closing at its highest since November 2021 on Thursday.
The Hang Seng Tech Index led declines, losing 1.2% on the day.
Market attention will be squarely on the Politburo meeting due later this month, given that it will likely shape economic policy for the rest of the year.