Daily Report | Mainland Chinese stocks cap worst week since May as Brexit concerns linger

Mainland Chinese stocks closed slightly higher on Friday, but still booked their biggest weekly drop since mid-May as fears lingered over a potential market turmoil if Britain votes to leave the European Union next week.

The Shanghai Composite Index ended Friday higher by 0.4 per cent or 12.29 points at 2,885.1. However, it declined 1.4 per cent for the week, marking the second consecutive week of loss.

“Risk aversion will continue to grow as we head into the Brexit vote. Hong Kong and mainland Chinese markets may be volatile next week,” said analysts from Hong Kong-based Bright Smart Securities in a note on Friday.

In Hong Kong, the benchmark Hang Seng Index closed up 0.7 per cent or 131.56 points at 20,169.98. For the week, it sank 4.1 per cent, the biggest decline since early May.

Major central banks have recently expressed concerns about the implication of the Brexit vote, including renewed market volatility and impact on the British economy and its monetary policy stance.

On Friday, risk sentiment slightly shifted after campaign activities were suspended following the shooting death on Thursday of Jo Cox, a pro-EU British lawmaker. However, analysts said risks were still out there.