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SHANGHAI: Shanghai stocks plumbed a 20-month low on Friday as investors worried rising trade tensions with the United States could add pressure to the country's economic growth.
The blue-chip CSI300 index fell 0.5 per cent to 3,753.43, the Shanghai Composite Index hit its lowest since September 2016 before ending down 0.7 per cent at 3,021.90.
Both indexes were down for the third session in a row.
For the week, SSEC was down by 1.5 per cent, while CSI300 slipped 0.7 per cent.
Nearly 80 stocks tumbled the maximum allowed 10 pct on Friday, led by tech firms, in particular small-cap companies.
China's tech-heavy start-up board ChinextP dropped 1.9 per cent to a four-month low.
"There is a long-term correction in the valuations for those small-cap firms, as they are still overvalued without solid results," said Zhu Junchun, an analyst with Lianxun Securities.
Eyes were on the development of China-US trade spat.
The United States has nearly completed a second list of tariffs on $100 billion in Chinese goods, as President Donald Trump prepares to enact an initial round of duties that are expected to trigger an in-kind response from Beijing, several sources said.
While it is not clear when Trump will activate the measures, rising Sino-US trade tensions will put additional pressure on China's economy, which is starting to show signs of cooling under the weight of a multi-year crackdown on riskier lending.
China said on Friday it would respond quickly to protect itself if the United States hurts its interests, as US President Trump gets ready to unveil revisions to his initial tariff list targeting $50 billion of Chinese goods.
"Amid the continued weakness in the A-share market and external uncertainties, there are strong expectations that Beijing could roll out more supportive policies than just holding fire on rates, including reserve requirement ratio (RRR) cut and fiscal policies to bolster the real economy," Zhu said.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.35 per cent while Japan's Nikkei index closed up 0.5 per cent.
At 07:03 GMT, the yuan was quoted at 6.4166 per US dollar, 0.25 per cent weaker than the previous close of 6.4005.
The largest per centage gainers in the main Shanghai Composite index were Fuda Alloy Materials Co Ltd up 10 per cent, followed by Chongqing Wanli New Energy Co Ltd gaining 9.98 per cent and Shanxi Coal International Energy Group Co Ltd up by 9.95 per cent.
The largest per centage losses in the Shanghai index were Shanghai Chuangli Group Co Ltd down 10.06 per cent, followed by Guangdong Dcenti Auto-Parts Stock Ltd Co losing 10.05 per cent and Weifang Yaxing Chemical Co Ltd down by 10.05 per cent.
So far this year, the Shanghai stock index is down 8.6 per cent, the CSI300 has fallen 6.9 per cent while China's H-share index listed in Hong Kong is up 1.6 per cent.
Shanghai stocks have declined 2.34 per cent this month.
As of 07:04 GMT, China's A-shares were trading at a premium of 20.76 per cent over the Hong Kong-listed H-shares.
