China stocks inch up as investors brace for fresh trade talks

HONG KONG: China shares ended a tick higher on Friday and posted weekly gains as Beijing and Washington prepared for a fresh round of talks due next week, but the rise was capped as it remained unclear whether the two nations can strike a durable trade deal.

The Shanghai Composite index closed 0.2 per cent firmer at 3,011.06 points, up 1.1 per cent week-on-week. The blue-chip CSI300 index was up 0.5 per cent on the day, and closed 1.8 per cent higher on the week.

CSI300's financial sector sub-index ended down 0.1 per cent, the consumer staples sector closed 2.7 per cent higher, the real estate index ended 1.4 per cent weaker and the healthcare sub-index closed up 1.7 per cent.

The smaller Shenzhen index ended up 0.6 per cent and the start-up board ChiNext Composite index closed almost 1 per cent stronger.

Top representatives of the United States and China are organizing a resumption of talks for next week to try to resolve a year-long trade war between the world's two largest economies, Trump administration officials said.

However, White House Economic Adviser Larry Kudlow sounded unclear about the timeline for relaunching face-to-face talks, saying that these would begin "soon".

Rating agency Moody's affirmed China's rating at A1 with a stable outlook on Thursday, citing the country's financial and policy means to contain any rise in its economy-wide leverage and mobilise resources to support its stressed public sector entities and maintain financial stability.

Chinese banks extended less in new yuan loans in June, according to a Reuters calculation based on official data, but regulators assured that credit needs of the broader economy were met.

"In the short-term, the A-share market may climb with (some) volatility," Galaxy Securities' analysts wrote in a report on Friday. "(Investors) should continue to pay attention to the rolling out of policies relevant to markets and changes in companies' valuations following mid-year results."

Asian markets were hoving near two-month highs on Friday as investors braced for US employment data, a key release that could stoke or temper market expectations about aggressive policy easing by the Federal Reserve.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.1 per cent, while Japan's Nikkei index closed up 0.2 per cent.

The largest percentage gainers in the main Shanghai Composite index were Hengtong Logistics Co Ltd, up 10.1 per cent, followed by Harbin High-Tech Group Co Ltd and Fujian Raynen Technology Co Ltd, both up 10 per cent.

So far this year, the Shanghai stock index is up 20.7 per cent and the CSI300 climbed 29.3 per cent. Shanghai stocks rose 1.1 per cent this month.

About 15.68 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 19.44 billion shares.

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