China shares end lower as trade dispute looms; but post weekly gain

Credit: REUTERS/CHINA STRINGER NETWORK

China stocks ended weaker on Friday, as investors kept a cautious stance ahead of data that was released after market hours, while U.S. tariff threats continued to weigh.

SSEC -1%, CSI300 -0.8%; both up for the week

Official data was released after market hours on Friday

Market in holding pattern before G20 - analysts

HONG KONG, June 14 (Reuters) - China stocks ended weaker on Friday, as investors kept a cautious stance ahead of data that was released after market hours, while U.S. tariff threats continued to weigh.

** At close, the Shanghai Composite index .SSEC was down 1% at at 2,881.97 points, but still ended up 1.9% for the week. The blue-chip CSI300 index .CSI300 closed 0.8% lower, but 2.5% higher week-on-week.

** CSI300's financial sector sub-index .CSI300FS closed lower by 0.6%, the consumer staples sector .CSI000912 ended down 0.4%, the real estate index .CSI000952 ended up 0.3% and the healthcare sub-index .CSI300HC was flat.

** The smaller Shenzhen index .SZSC was down 1.8% and the start-up board ChiNext Composite index .CNT was weaker by 1.7%.

** China's industrial output growth unexpectedly slowed to a more than 17-year low in May, official data showed after market hours on Friday, adding that the country's investment also cooled, in the latest sign of weakening demand in the world's second-largest economy as the United States ramps up trade pressure. CNIO=ECI, CNRSL=ECI

** Real estate investment rose 11.2% in the first five months of the year in annual terms, slowing from 11.9% in the January-April period, official data showed on Friday.

** Investors across broader Asia were wary about slowing growth in China and paling expectations of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to work towards a resolution to a prolonged trade war.

** U.S. President Donald Trump said this week he still plans to meet Chinese President Xi Jinping later this month, but declined to set a deadline for levying tariffs on another $325 billion of Chinese goods.

** Expectations of more stimulus in China have been growing as the trade dispute threatens to escalate into a full-blown trade war that could push the global economy into recession.

** The Chinese stock market will likely be in holding pattern before clearer signals emerge in the trade talks, Kaiyuan Securities' analysts wrote in a memo on Friday.

** "The G20 meeting at the end of the month and follow-up talks in the Sino-U.S. trade dispute are still the events that would have the most impact on the market," the analysts wrote.

** Morgan Stanely noted a recovery in sentiment in A-shares this week, driven by higher trading volume. "We believe the uptick in sentiment was also helped by the easing measures to boost infrastructure investment introduced by the Chinese government on June 10," the bank said in a note on Friday.

** Chinese Vice Premier Liu He on Thursday also signalled step up support for the economy and keep ample liquidity in the financial system. A state newspaper reported this week that China is expected to adjust money and credit supply in coming weeks.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS was weaker by 0.5%, while Japan's Nikkei index .N225 rose 0.4%.

** So far this year, the Shanghai stock index is up 15.6%. Shanghai stocks have slid 0.6% this month.

** The Shanghai stock index is below its 50-day moving average and above its 200-day moving average.

(Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)

((noah.sin@thomsonreuters.com; Reuters Messaging: noah.sin.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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