China stocks slip for second week as investors await more policy support
Updates for closing
SHANGHAI, Dec 20 (Reuters) -China stocks fell on Friday and registered a second week of losses as investors eyed more policy tonic from Beijing to shore up the economy.
** At the close, the Shanghai Composite index .SSEC weakened 0.06% to 3,368.07, while the blue-chip CSI 300 index .CSI300 lost 0.45%. Both gauges saw a second week of decline.
** The Hang Seng index dropped 0.2% at close, bringing the loss this week to 1.3%.
** Energy shares .CSIEN led the fall, after state refining giant Sinopec said China's oil consumption is set to peak by 2027.
** The consumer staples sector .CSI000912 lost 0.99% and the healthcare sub-index .CSI300HC lost 0.28%.
** China's policy-triggered bull run that started in late September has lost steam as economic fundamentals have yet to turn the corner amid looming U.S. tariff risks.
**China left its benchmark lending rates unchanged as expected at the monthly fixing on Friday. Persistent deflationary pressure and tepid credit demand call for more stimulus to aid the broad economy, but narrowing interest margins on the back of fast falling yields and a weakening yuan limit the scope for immediate monetary easing.
** The 2025 budget deficit and mix are more positive than expected and suggest Beijing is willing to set a high growth target and record fiscal budget to boost market confidence, but further policy details are unlikely before March, Morgan Stanley said in a note.
** Still, the benchmark CSI 300 index has climbed 16% so far this year and is set to end a three-year losing streak.
** Trading also remains active, especially among smaller stocks. Outstanding margin trading - a barometer of leveraged bets - hovered near a nine-year high of 1.87 trillion yuan ($256.21 billion).
** Limiting losses, Chinese technology shares gained after The Information reported that the U.S. Department of Commerce has recently asked Nvidia NVDA.O to look into how the company's products ended up in China over the past year.
** The STAR Chip index .STARCHIP jumped 3.9%, while an index tracking China-listed semiconductor companies .CSI931865 surged 3.3%. Tech giants traded in Hong Kong .HSTECH added 0.1%.
($1 = 7.2988 Chinese yuan renminbi)
Reporting by Shanghai Newsroom; Editing by Mrigank Dhaniwala
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