Hong Kong and China shares rose on Friday, bolstered by the financial and resource sectors as investors saw weaker-than-expected Chinese data as giving Beijing more room to ease policy to boost growth.
The gains, in tepid turnover, clawed back up some of this week's losses for benchmark indexes. Further rises were stymied by technical resistance levels ahead of China trade data on Saturday U.S. nonfarm payrolls data later on Friday.
The Shanghai Composite Index and the China Enterprises Index of the top mainland listings in Hong Kong both rose 0.8 percent on Friday, while the Hang Seng Index climbed 0.9 percent.
For the week, the Hang Seng and China Enterprises Indices lost 2.2 and 4.1 percent respectively. The Shanghai Composite, whose seven-week winning streak was snapped, had its second worst week this year, shedding 0.9 percent.
It's a watching game with Beijing looking at U.S. data, and vice versa before they would commit to more policy easing. More data over the weekend and key earnings from next week will be key to short-term direction, said Larry Jiang, chief investment strategist at Guotai Junan International in Hong Kong.
The mainland's biggest lenders and oil producers were among the top boosts on Friday to the Hang Seng Index. Industrial and Commercial Bank of China (ICBC) and CNOOC Ltd gained 1 and 1.4 percent respectively.
Chinese banks could come into focus next week after data released after the market close showed that they extended 710.7 billion yuan ($112.5 billion) in new loans in February, below market expectations of 750 billion yuan.
The weaker-than-expected lending will put pressure on the central bank to cut banks' reserve requirement ratio (RRR) further.
Energy majors were the Shanghai Composite's top boosts, with the mainland's largest coal producer China Shenhua Energy Co Ltd up 1.2 percent. Smaller rival, Yangquan Coal gained 3.6 percent.
China Mobile Ltd hit the highest since last August in Hong Kong, gaining 4 percent to HK$84.20 in more than three times its 30-day average volume after Goldman Sachs upgraded China's large mobile operator to buy from neutral.
Goldman also raised its target price from HK$84 to HK$95, expecting smartphone adoption to drive healthy 3G and revenue growth. Goldman analysts also downgraded smaller rival China Telecom Corp Ltd, sending its stock down 2.4 percent.
China Mobile is among a slew of blue chip companies expected to post corporate earnings next Thursday. Others include China Overseas Land & Investment Ltd and Ping An Insurance (Group) Co of China Ltd.
AGILE TOPS CHINA PROPERTY WEAKNESS
Data on Friday showed China's annual consumer inflation slowed sharply to a 20-month low in February, and factory output and retail sales also cooled more than forecast, giving policymakers ample room to further loosen policy to support flagging growth.
But that is unlikely to include the Chinese property sector, with shares of developers underperforming after the Chinese Minister for Housing and Urban-Rural Development reiterated Beijing will not ease curbs on home purchases in the near term.
Agile Property Holdings Ltd led losses in the sector in Hong Kong, slipping 3.5 percent to HK$9.15 in almost three times its 30-day average volume after Credit Suisse downgraded it to underperform.
This followed its underwhelming 2011 earnings report on Thursday. Shares of Agile, which hit a six-month peak in February, have lost 12.5 percent in March. The stock tumbled nearly 40 percent last year.
On Monday, investors will be eyeing the earnings report of major Chinese developer Longfor Properties Co Ltd, which gained 0.4 percent on Friday.