Shanghai stocks retreat on disappointing PMI

Shanghai stocks retreated on Friday amid lower manufacturing PMI figure released today, but posted a weekly gain reversing the earlier five-week drop.

The benchmark Shanghai Composite Index dipped 0.24 percent to 2,898.7 points. The smaller Shenzhen Component Index also slid  by 0.23 percent to 8,922.69 points, and the blue chip CSI300 index closed 0.31 percent lower at 3,629.79 points.

Turnover on the two major bourses totaled 437.47 billion yuan (US$63.38 billion), shrinking slightly from the 445.93 billion yuan on the previous session.

China's manufacturing PMI edged down 0.7 points to 49.4 in May from a month earlier to return to the contraction territory, while the non-manufacturing PMI remained flat, data from the National Bureau of Statistics showed.

Over a half of the industry sectors posted losses, according to the Wind Information, led by the coal shares of which the sub-index dropped 1.63 percent.

Coal firms such as Beijing Capital Retailing Group Co, Shanxi Coal International Energy Group Co and Yunnan Coal & Energy Co all fell by over 3 percent, and Shanxi Meijin Energy Co sank 4.93 percent.

The food and beverage sector was also among the biggest decliners, with Yan Tai Shuang Ta Food Co slumping 7.64 percent, and Hainan Yedao Group Co and Anji Foodstuff Co both down by over 4 percent.

Basic chemical industry, automobile firms, and stocks related to soybean and the chicken industry were all weaker.

For the week, however, all the three major indexes for A shares rebounded from earlier slumps.

The Shanghai Composite Index posted a weekly gain of 1.6 percent, reversing the declines for the previous five weeks in a row. The turnover on the Shanghai bourse also expanded to over 1 trillion yuan comparing with the 951.1 billion yuan last week.