China's benchmark Shanghai Composite Index on the Shanghai Stock Exchange closed at 4,345.36 on Friday, down 0.03 percent, or just 1.10 points, from the previous close as the heavy-weighted shares dropped.

The Shanghai Stock Exchange opened at 4,315.37 points, 31.09 points lower than the previous close.

The Industrial and Commercial Bank of China declined by 1.73 percent to 5.67 yuan while the Bank of China went down 1.10 percent to 5.40 yuan. China Vanke, the nation's biggest publicly traded property developer, closed 0.40 percent lower at 27.30 yuan.

In the afternoon, word spread that the price of electricity could rise, resulting in coal producers pushing the market up, with Jingyuan Coal rising by 10.02 percent, breaking the daily limit of 10 percent to 10.65 yuan.

Steel shares continued their upward trend. Wugang Steel went up by 4.36 percent to 11.73 yuan and Angang Steel jumped by 4.08 percent to 22.20 yuan.

The combined turnover of the nation's two bourses further expanded from 209.9 billion yuan on Thursday to 215.2 billion yuan on Friday.

By mid-August, there will be many listed companies publicizing their interim reports and the stock market is likely to set new highs, as most of them have performed very well, chief analyst of CITIC Securities Cheng Weiqing said. (One U.S. dollar equals to 7.57 yuan)