Chinese shares mixed as profit-taking kicks in after four days of gains

Chinese stocks were mixed Friday, capping a week that took the benchmark Shanghai Composite Index to its lowest level in more than a year, and then to its largest one-day gain in six years.

The Shanghai Composite Index slipped 0.7 percent, or 25.27 points, to 3,557.80. The index gained 15 percent for the week, most of it coming in a 9.3 percent surge Thursday after the government slashed the stamp tax on share transactions.

The index is still down 32.4 percent since the beginning of the year.

On China's smaller, second bourse, the Shenzhen Composite Index rose 1.4 percent to 1,058.42.

Friday's session was "a tug-of-war between those who were buying on hopes Beijing will launch more market-boosting measures, and those who took profits on concerns the markets may drop again," said Shenyin & Wanguo strategist Chen Li.

Analysts said many investors expect Beijing to boost the markets further by permitting margin trading or launching stock index futures.

Banks led Friday's decline on concerns previously nontradable shares could flood the market when they are freed from lockup periods, said Wu Yiping, an analyst at Haitong Securities. Investor are worried additional shares would dilute current stock values.

Lender ICBC lost 4.7 percent to 6.49 yuan. On April 28, 2.8 billion ICBC shares held by institutional investors will be released from a lockup period.

Bank of Communications dropped 3.5 percent to 10.66 yuan. On May 16, 13.2 billion of its shares will be free of lockup restrictions.

Other financial issues rose on hopes that market gains will help their earnings.

Citic Securities rose by the 10 percent daily limit to 35.34 yuan. China Life Insurance rose 4.1 percent to 34.21 yuan.

Chinese gold and copper producer Zijin Mining saw its shares more than triple their initial public offering price of 7.13 yuan on their debut Friday. The shares were suspended from trading for a half-hour due to what the Shanghai Stock Exchange said was "abnormal trading." When they resumed trading they fell back to end at 13.92 yuan.

In currency dealings, the U.S. dollar was at 7.0089 around 0730 GMT on the over-the-counter market, up from Thursday's close of 6.9970.