China stocks rise after oil prices fall

China's main stock indices rose Friday, following the rise of overseas markets as oil prices dropped below $130 a barrel.

The benchmark Shanghai Composite Index rose 3.49 percent to 2,778.37. The Shenzhen Composite Index for China's smaller second market rose 3.03 percent to 824.68

Chinese oil giant Sinopec was one of the day's highlights, up 7.57 percent. A company statement dated Thursday said its first-half profit will fall more than 50 percent from the same period last year. Sinopec blamed government controls that limit its ability to pass on record-high crude costs to consumers.

Friday's stock rebound was expected on the recent news in oil prices, but it's hard to say that buying sentiment is recovering, said Zhang Linchang, strategist at Guotai Jun'an Securities in Shanghai.

"Macroeconomic concerns still stand because of the possibility of further monetary tightening measures and the pressure of inflation," Zhang said. "Investors should stay cautious."

Other top China stocks Friday were China Southern Airlines, up 8.66 percent; China Life Insurance, the country's biggest life insurer, up 8.28 percent; China United Communications, up 8.41 percent; and Aluminum Corp. of China, up 8.66 percent.

This week, crude oil futures on the New York Mercantile Exchange lost nearly $16 over three days on concerns that record level pricing was cutting into global demand. Prices rebounded in Asian electronic trading Friday to around $131 a barrel after dropping below $130 in New York on Thursday.

A week ago the front-month Nymex crude oil contract hit a record above $147 a barrel.