Mainland stocks extend weekly losses on tariffs

Chinese mainland stocks ended Friday higher, but extended weekly losses as US tariffs on some Chinese goods took effect.

The benchmark Shanghai Composite Index closed 0.49 percent higher to 2,747.23 points, after hitting a two-year low in the morning trading session. Over the past week, it fell 3.5 percent, marking its seventh straight weekly loss.

Meanwhile, the blue-chip CSI300 index ended the past week 4.2 percent lower, its fifth consecutive weekly loss, even though it closed up 0.68 percent to 3,365.12 points.

Trading remained thin, with the daily combined turnover standing at 356.4 billion yuan ($53.6 billion) on Friday, up from 315.5 billion yuan the previous trading day.

Following a week-long sell-off, some investors are expected to continue buying beaten-down and big-cap stocks this week.

The market had already had a self-initiated recovery Friday, without any evidence of State intervention for market support, according to securities analysts.

Market participants predicted that A shares could have a short-term rebound this week, as investors that have been worrying about the escalating trade war for weeks may take a breath after the US hastily fired the most recent shot in its trade row with China. On Friday, the US imposed tariffs on $34 billion worth of Chinese imports.

Furthermore, July will gradually witness earnings releases by listed companies. Those with robust growth are expected to gain investors’ attention.

Still, in the long run, the outlook for the Ashare market is expected to be full of uncertainties, as the trade issue between the world’s two largest economies is unlikely to be resolved soon.

Yan Weixiao, an analyst with Founder Securities, was quoted as saying in a Reuters report that the psychologically key 2,638 level for the Shanghai index, which was hit in March 2016, will probably be breached.