SHANGHAI: China stocks edged up on Friday to end the week higher, as expectations that Beijing would take necessary measures to underpin the world's second-largest economy overshadowed concerns over escalating US-China tensions.
At the close, the Shanghai Composite index was up 0.22% at 2,852.35, while the blue-chip CSI300 index was up 0.27%.
For the week, SSEC and CSI300 gained 1.4% and 1.1%, respectively.
China has room to stimulate an economy trying to recover in the wake of the coronavirus pandemic, but the government does not want to open the "floodgates", Premier Li Keqiang said on Thursday at the end of the annual meeting of parliament.
"We have reserved policy room. Be it fiscal, finance, or social security," Li said.
China's factory activity likely rose for a third straight month in May as the economy recovered from strict lockdowns implemented to contain the coronavirus outbreak, which has hammered global business activity.
Leading the gains for the week, the tech-heavy start-up ChiNextP was up 2.0%, as investors anticipated robust support from Beijing to bolster its technology sector amid U.S. restrictions.
For the month, the start-up index gained 0.7%, versus a loss of 0.3% and 1.2% for SSEC and CSI300 in the same period, respectively.
China needs to upgrade its economy as it is in a key in-depth transformation period, said Li Bingyang, chairman of Hangzhou Zhuhangusong Capital, adding, he expected continued support for the country's technology sector.
Rising tensions between China and the United States weighed on the market.
U.S. President Donald Trump is due to announce later on Friday his response to the Chinese parliament's advancement of security legislation for Hong Kong, which many lawyers, diplomats and investors fear could erode the city's freedoms.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.23%, while Japan's Nikkei index closed down 0.18%.
At 0703 GMT, the yuan was quoted at 7.1484 per U.S. dollar, 0.05% weaker than the previous close of 7.1447.
As of 0704 GMT, China's A-shares were trading at a premium of 26.30% over the Hong Kong-listed H-shares. - Reuters
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