SHANGHAI — China stocks fell on Friday, with foreign funds halting their buying spree after nearly one month of net inflows, as investors examined China’s economic recovery after an expectation-led shares rally.
** China’s blue-chip CSI 300 Index lost 1.7% by the end of the morning session, while the Shanghai Composite Index was down 1.4%.
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** The Hang Seng Index slumped 1.8% and the Hang Seng China Enterprises Index dropped 2%.
** For the week, the CSI 300 lost 1.7% so far, and the Hang Seng tumbled 5%.
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** Foreign money snapped a buying streak since Jan. 3, selling a net 6.2 billion yuan ($919.35 million) of Chinese shares via the Stock Connect Scheme so far on Friday.
** Meanwhile, there are no clear signs of domestic incremental money flowing into the market yet, Industrial Securities wrote in a note.
** “There are louder voices for a correction after a January surge in the market,” said Bohai Securities analysts. “Index-wise, we are entering an observation stage in the near term to examine the recovery and more policies.”
** China’s stock benchmark jumped 7.4% last month on bets of China’s strong rebound in holiday spendings.
** They added future upside depends on a fundamental recovery, especially in the consumption and property sectors.
** Market liquidity also tightened marginally after the Lunar New Year holidays, with the country’s central bank draining 720 billion yuan via open market operations this week.
** Most sectors fell, with shares in resources, new energy and automobiles down more than 2% to lead the decline.
** Tech giants listed in Hong Kong also lost 1.8%.
** In a bright spot, China’s services activity in January expanded for the first time in five months as spending and travel got a boost from the lifting of stringent COVID curbs, sending business confidence to near 12-year highs, a private sector survey showed on Friday. ($1 = 6.7439 Chinese yuan) (Reporting by Shanghai Newsroom; editing by Uttaresh.V)