SHANGHAI, May 28 (Reuters) – China stocks slipped on Friday, but posted their best week in more than three months as inflation and policy tightening worries faded and a strong yuan boosted foreign inflows into the country’s equities market.
** The blue-chip CSI300 index fell 0.3% to 5,321.09, while the Shanghai Composite Index eased 0.2% to 3,600.78.
** The tech-heavy start-up board ChiNext rose 0.2%, while Shanghai’s STAR50 index shed 0.8%.
** For the week, CSI300 advanced 5.9%, while SSEC climbed 4.5%, both logging their best weekly gains since the week ended Feb 12.
** Analysts and traders attributed the week’s strong rally to easing worries over inflation as Beijing vowed to curb significant prices gains in the commodities market.
** Latest data also showed earnings at China’s industrial firms grew at a slower pace in April, calming concerns over policy tightening that weigh on risk appetite and valuations.
** A stronger yuan also helped polish the appeal of Chinese equities for foreign investors, bringing record weekly inflows into the onshore market.
** For the week, investors had purchased nearly 50 billion yuan ($7.85 billion) worth of A-shares via the Stock Connect linking mainland and Hong Kong, their biggest weekly inflow since the launch of the stock link, as the Chinese currency strengthened past the 6.4000 per dollar level.
** Investors looked past fresh strains in Sino-U.S. relations after the U.S. Senate on Thursday advanced a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology. ($1 = 6.3733 Chinese yuan renminbi) (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Ramakrishnan M.)
