China stocks slip as rally starts to run out of steam

SHANGHAI (Reuters) - China stocks ended lower on Friday as the New Year rally showed signs of fatigue, with a stronger yuan lending little support to equities.

The blue-chip CSI300 index fell 0.6 percent, to 3,347.67 points, while the Shanghai Composite Index lost 0.4 percent to 3,154.32 points.

For the week, CSI300 was up 1.1 percent, while SSEC was up 1.6 percent.

A run of data from China in coming weeks is expected to show the economy entered 2017 with considerable momentum.

Market news that the finance ministry was to study new measures to cut taxes and reduce the overall cost burden on firms drew a muted response.

"Investors are likely to stay lukewarm on the stock market until the end of Lunar New Year when sentiment is expected to improve," said Cao Xuefeng, head of research at Huaxi Securities.

The Lunar New Year holidays begin in late January.

Sectors were mixed. Gains were led by energy shares, while financial and healthcare plays lagged behind.

(Reporting by Luoyan Liu and John Ruwitch; Editing by Eric Meijer and Richard Borsuk)