China stocks edge lower; utilities drop

The benchmark Shanghai Composite Index dropped 0.4 percent to 3,624.23. The Shenzhen Composite Index shed 0.8 percent to 1.124.29.

Electrical utilities fell as investors sold to cash in on gains made earlier in the week from speculation over possible increases in rates following the deadly earthquake in Sichuan province.

"Some institutional investors are using this tragedy to speculate on reconstruction-related shares such as cement, electricity power and steel shares," said Zhang Linchang, an analyst at Guotai Junan Securities.

Sichuan Mingxing Electric fell 6.7 percent to 7.24 yuan and Chongqing Jiulong Electric Power dropped 6 percent to 7.24 yuan. Both companies had surged by the 10 percent daily limit on Thursday.

Steel shares also fell following recent gains. Shanghai-based Baoshan Iron & Steel fell 1.5 percent to 13.85 yuan; Wuhan Iron & Steel fell 1.3 percent to 17.61 yuan.

But steelmaker Chongqing Iron & Steel gained 6.88 percent to 8.55 yuan -reflecting expectations that the company will benefit from its location near the earthquake zone. Chongqing municipality borders Sichuan.

Bank of Communications fell 3.1 percent to 9.46 yuan after 13.24 billion of its shares, representing 27 percent of its total capital, began trading after the expiry of a lockup period on institutional holdings.

In currency dealings, the U.S. dollar was at 6.9881 yuan on the over-the-counter market, down from Thursday's close of 6.9946.