Friday decline but strong week for stocks

China stocks retreated on Friday from sharp gains in the previous sessions but still posted a strong weekly rise for the first trading week of 2021.

The benchmark Shanghai Composite Index dipped 0.17 percent to close at 3,570.11 points, while the smaller Shenzhen Component Index edged down 0.24 percent to 15,319.29 points.

The STAR 50 Index shed 0.23 percent to 1,378.74 points, and the ChiNext Composite Index also ended 0.37 percent lower at 3,150.78 points.

Trading volume on the two major bourses stayed above 1 trillion yuan, at 1.13 trillion yuan (US$174.99 billion), down from 1.22 trillion yuan in the precious session. 

Overseas capital flowed into the Chinese mainland on Friday, with a net influx of 20.62 billion yuan, the second highest in history, via the Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong. The Shanghai market saw a net inflow of 10.59 billion yuan.

From a mid-term perspective, A shares are maintaining an upward trend, according to Yuekai Securities, as most of inter-bank interest rates went down, daily turnover on the two markets remained above 1 trillion yuan, and the continuity of policies provided a stable policy environment for market development.

Despite overall losses in the major indexes, the number of A shares posting gains was higher than those which declined, with over 2,000 up and 1,966 closing lower, according to data from Wind Information.

Stocks of 70 listed firms surged to hit the daily cap, while 24 tumbled by the limit.

Among industries, the catering and tourism sector led the declines, after the mainland on Thursday reported 53 newly confirmed COVID-19 cases. China Tourism Group Duty Free Corp lost over 6 percent, and Caissa, Tosun Development Co fell over 4 percent.

Agricultural shares, liquor firms, and the aerospace and military defense industry also posted losses.

Computer hardware shares, however, posted strong gains, with four Shenzhen-listed companies — Inspur Electronic Information Industry Co, Unisplendour Corp, SZZT Electronics Co and Guangzhou KingTeller Technology Co — all surging by the daily maximum of 10 percent.

Internet firms also performed well. Beijing Shuzhi Technology Co and Zhejiang Jinke Culture Industry Co, both listed on the ChiNext board, soared by the 20 percent cap.

Auto shares, the culture and media industry, shares related to eSports, and sea transportation firms were also among the big gainers.

For the week, the Shanghai Composite Index surged 2.79 percent, extending the 2.25 percent rise in the previous week. 

Total trading volume on the Shanghai market, meanwhile, expanded sharply to 2.66 trillion yuan this week from 1.6 trillion yuan.