SHANGHAI, Nov 26 (Reuters) - China's key stock index closed down 0.9 percent in thin volume, as a drop in the amount of cash available in the financial system in the wake of central bank tightening prompted investors to hold off making new positions.
The Shanghai Composite Index ended down 0.6 percent for the week at 2,871.7 points.
It fell below the 250-day moving average, now at 2,882 points, a mark analysts consider reasonable in the near term after large falls earlier this week.
Recent monetary tightening steps are starting to affect the availability of cash and to push up money market borrowing rates significantly, as underscored by bill sales by the finance ministry and a policy lender not finding enough buyers on Friday.
Against that backdrop, investors on Friday spurned sectors such as banks and steel, which have been the focus of much buying and selling activity around speculation over how quickly authorities will move to rein in lending in their fight against inflation.
Market turnover has slumped since the start of November, with retail investors, easily influenced by policy moves or expectations thereof, panic selling out of large-cap issues over the last couple of weeks.
New stock account openings for trading in local-currency shares fell 23 percent on the week, compared with record highs hit in October. (Reporting by Farah Master; Editing by Jason Subler)