BEIJING, June 8 (Xinhua) -- The central bank's first interest rate cut since December 2008 boosted Chinese shares for only half a day on Friday, as investors shifted their attention to economic data that will be issued over the weekend.
Concerns over the economic health of the world's second-biggest economy continued to weigh on the stock markets, sinking benchmark indices by about half a percentage point and extending the markets' losing streak to five days in a row.
The People's Bank of China (PBOC), the country's central bank, announced Thursday night that it will lower benchmark interest rates by 25 basis points and give banks more freedom to set deposit and interest rates, a significant step toward the liberalization of interest rates.
Banks are allowed to float deposit rates upward by as much as 10 percent while offering a lending rate discount of as much as 20 percent.
Boosted by the central bank's rate cut, the Shanghai Composite Index opened 0.57 percent higher, but wandered one point into negative territory over concerns that the country's economy may slow further in the second quarter.
It picked up slightly by 0.14 percent to close at 2,296.24 for the morning break. Pessimism over economic data to be released this weekend dominated the market in the afternoon session, with the index losing 11.68 points, or 0.51 percent, to close at 2,281.45.
The Shenzhen Component Index rose 0.86 percent at opening but gave up its gains before closing at 9,707.18, down 48.46 points, or 0.5 percent.
The stock market's weakness on Friday sealed a weekly loss of 3.88 percent for the Shanghai Composite Index and 4.32 percent for the index in Shenzhen.
More shares changed hands, with combined turnover rising slightly to 121.6 billion yuan (19.24 billion U.S. dollars), slightly higher than Thursday's 113.89 billion yuan.
Losers outnumbered gainers by 553 to 301 in Shanghai and 788 to 590 in Shenzhen.
The banking sector was weak, as many analysts said the PBOC's step to liberalize interest rates would squeeze banks' profits. The Industrial and Commercial Bank of China, the country's largest lender, weakened 0.72 percent to 4.16 yuan per share. China Construction Bank, the second-largest bank, lost 0.89 percent to 4.45 yuan. The Bank of China dipped 0.33 percent to close at 3 yuan.
Property developers fell slightly despite the rate cut. Earlier this week, a spokesman for the Ministry of Housing and Urban-Rural Development reiterated that the government will not relax its measures to cool the property market and will stop local governments from loosening policies aimed at curbing housing speculation.
Vanke, China's largest property developer, slid 0.45 percent to close at 8.92 yuan. Gemdale Poly Estate moved down 0.07 percent to close at 13.63 yuan. China Merchants Property skidded 0.28 percent to close at 25yuan.
Airline companies gained ground, as falling global oil prices are expected to improve their profitability. Air China rose 1.29 percent to 6.29 yuan. Hainan Airlines jumped 3.58 percent to 5.21 yuan.
The National Bureau of Statistics will release a series of economic figures on Saturday, including those for inflation, investment, industrial output growth and social consumption.
The General Administration of Customs will update China's import and export data on Sunday.
