SHANGHAI, April 30 (Reuters) - China stocks fell on Friday to close the week lower as data showed the country’s factory activity growth slowed in April, while worries over policy tightening and Sino-U.S. tensions continued to weigh on the market.
** The blue-chip CSI300 index fell 0.8% to 5,123.49, while the Shanghai Composite Index ended down 0.8% at 3,446.86.
** For the week, CSI300 slipped 0.2%, while SSEC dropped 0.8%.
** China’s factory activity expanded at a slower pace and missed forecasts in April as supply bottlenecks and rising costs weighed on production and overseas demand lost momentum.
** Despite the soft data, analysts and traders said overall solid economic growth allowed Beijing more leeway to rein in bubbles in its financial markets.
** China’s economic recovery quickened sharply in the first quarter with record growth of 18.3%, shaking off the hit from last year’s slump.
** Caution also prevailed ahead of the Labor Day break, as the country’s financial markets will be shut during May 1 and May 5.
** A record-breaking wave of Chinese tourists will hit the road for the Labour Day break, and with borders still shut many will be travelling domestically, to more remote locations and for longer, giving China’s economy a powerful short-term boost.
** “People are still worried about China’s monetary policy, and the market remains pessimistic given the current monetary conditions,” said Song Zhenyu, a fund manager at Beijing Jiayi Asset Management Company.
** Song said any gradual policy shift would happen with a tightening bias as the central bank had recently noted the rapid rise in commodity prices, raising worries over inflation.
** Tensions between Beijing and Washington also added to the pressure on the market.
** U.S. President Joe Biden took aim at China in his first speech to Congress, pledging to maintain a strong U.S. military presence in the Indo-Pacific and promising to boost technological development and trade. (Reporting by Shanghai Newsroom; Editing by Vinay Dwivedi)