China blue chips suffer worst week in eight as growth, trade worries linger

Chinese blue-chip stocks slipped on Friday to end their worst week since March as economic growth worries linger on lacklustre consumption and U.S.-China trade frictions. ** At the close, the Shanghai Composite index was down 0.1% at 2,868.46. The index fell 0.9% week on week, its first week in negative territory in May ** The blue-chip CSI300 index fell 0.3% on Friday. It fell 1.3% from the previous week, its biggest weekly drop since mid-March ** The CSI300's financial sector sub-index fell 0.1%, the consumer staples sector lost 0.9%, the real estate index was flat and the healthcare sub-index dropped 1.1% ** The smaller Shenzhen index edged up 0.2% and the start-up board ChiNext Composite index added 0.3%

** China's consumption remained weak and retail sales fell 7.5% in April, even as industrial output beat estimates and rose for the first time in 2020 ** U.S. President Donald Trump said he has no interest in speaking to Chinese President Xi Jinping right now and suggested he could even cut ties with the world's second-largest economy, as the pandemic had cast a pall over his January trade deal with Beijing ** A-share non-financial companies' earnings fell 50.7% year on year in the first quarter, the third-worst quarter since the global financial crisis, according to Bank of America Securities estimates in a note on Friday

** But the firm's analysts added that "1Q20 likely marked the bottom of earnings growth ...as demand has started to recover since April, supported by stimulus policies, pent-up demand, among others" ** The Chinese parliament's annual meeting is set to start on May 22, after a delay due to the coronavirus outbreak

** China's central bank unexpectedly kept the interest rate on its medium-term funding for financial institutions steady on Friday. Authorities have stepped up the pace of monetary easing recently to combat the economic slowdown ** Around the region, MSCI's Asia ex-Japan stock index gained 0.2% while Japan's Nikkei index closed up 0.6% ** At 0715 GMT, the yuan was 0.08% weaker at 7.0994 per U.S. dollar ** The Shanghai stock index is down 6% year to date and the CSI300 has fallen 4.5%. Shanghai stocks have risen 0.3% this month. ** Dollar-traded B-shares, which plunged on Tuesday, fell 7.2% this week in their worst performance since January 2016 ** About 18.90 billion shares were traded on the Shanghai exchange, down from 19.78 billion in the previous session