The benchmark Shanghai Composite Index slipped 3.78 points, or 0.2 percent, to close at 2,598.69. The Shenzhen Composite Index for China’s smaller second exchange ended little changed at 1,157.12.
Investors were wary ahead of a five-day trading break that starts Wednesday for the traditional Mid-Autumn Festival.
“Most investors preferred to wait until after the holidays, because there were still a lot of uncertainties about policy,” said Wen Lijun, an analyst for Nanjing Securities.
Regulators rejected rumors that banks might be told to set aside more reserves for loan defaults, which hurt bank shares this week. But Wen said investors worried the government might raise interest rates paid on bank accounts to counter inflation concerns while keeping lending rates the same, which would squeeze bank profits.
Agricultural Bank of China Ltd. shed 1.1 percent to 2.6 yuan, while Industrial and amp; Commercial Bank of China Ltd., China’s biggest commercial lender, slipped 0.3 percent to 3.96 yuan.
Investors bought pharmaceutical shares as a shelter against a possible interest rate hike. North China Pharmaceutical Co. advanced 7.7 percent to 12.21 yuan, while Shan Dong Dong-E E-Jiao Co., a traditional Chinese medicine maker, jumped 5.7 percent to 49 yuan.
Consumer goods and tourism shares rose again on hopes for strong holiday sales.
Chongqing Brewery Co. soared 9 percent to 49.23 yuan, while Inner Mongolia Yili Industrial Group, a major dairy producer, surged 5.7 percent to 40.59 yuan.
Emei Shan Tourism Co. added 3.6 percent to 21.03 yuan, while Beijing Jingxi Tourism Development Co. gained 1.6 percent to 15.11 yuan.
In currency markets, the yuan strengthened to 6.7244 to the US dollar from Thursday’s close of 6.7314.
