China's stock markets closed marginally higher on Friday as investors remained cautious following Thursday's drastic falls.

China's stock markets were down by nearly 5 percent Thursday due to a number of factors. Investors were selling to take recently gained profits and in anticipation of a number of imminent heavyweight IPO listings. They are also concerned about persistent rumors of possible interest rate hikes.

The imminent listings of Daqin Railway Co. and Industrial and Commercial Bank of China (ICBC), the country's biggest bank, were responsible for Thursday's falls, dealers said.

Other heavyweights listed outside the Chinese mainland, such as China Mobile and oil giant CNOOC are also expected to offer IPO's on the mainland markets.

Last month, Chinese investors sold off stocks in order to raise 500 billion yuan to buy into the long-anticipated IPO from the Bank of China, the country's second biggest commercial bank. The investors were required to deposit their cash in the hope of being allocated some of the bank's 6 billion A shares. Only about 20 billion of the 500 billion yuan was eventually absorbed by the bank from the offering made earlier this month.

Wang Sumin, an analyst with Lianhe Securities Co., said the market seemed cautious following black Thursday as the factors blamed for the fall still exist.

The Shanghai Stock Exchange's Composite Index, which comprises of yuan-denominated A shares and foreign-currency B shares, closed at 1,665.21, up 9.44 points, or 0.57 percent.

The Shanghai index opened on Friday at 1,641.14, down by 14.64, or 0.88 percent. The afternoon session produced a daily high of 1,676.75. The turnover of the Shanghai market was 24.61 billion yuan (3.07 billion U.S. dollars).

The major index of the Shenzhen Stock Exchange, the Shenzhen Component Index, was up by 38.43 points, or 0.93 percent, to close at 4,187.49, with a total turnover of 16.44 billion yuan.

Market heavyweights were mixed with Bank of China declining 0.28 percent and China Yangtze Power down 0.31 percent, while Sinopec climbed 0.53 percent and Baosteel rose 0.49 percent.

China is expected to make public its half-year economic data soon, and analysts are concerned that interest rate hikes may be one of the options for the central bank is considering to slow down the fast economic growth.

Source: Xinhua