SHANGHAI, April 22 Reuters China stocks weakened on Thursday, as SinoU.S. tensions dampened sentiment, offsetting a series of upbeat corporate earnings for the first quarter.

The bluechip CSI300 index fell 0.2 to 5,089.24, while the Shanghai Composite Index shed 0.2 to 3,465.11.

A bipartisan U.S. congressional push to counteract China picked up steam on Wednesday as a Senate committee overwhelmingly backed a bill pressing Beijing on human rights and economic competition and other lawmakers introduced a measure seeking billions for technology research.

Concerns over liquidity also put pressure on the market.

Onshore mutual funds assets under management AUM and their positioning concentration has risen substantially since 2018, with the top50 Ashare favourites representing 45 of equity mutual funds AUM and 52 of Northbound holdings, Goldman Sachs analysts, including Kinger Lau, said in a report.

Further significant market weakness and redemption pressures could test the authorities downside risk tolerance especially in the leadup to the Chinese Communist Partys centenary celebration on July 1, GS added.

Though the stock market has been quite stable for the past few weeks, Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, said market sentiment stabilized on news China considered supporting Huarong with central bank funds.

The value of shares investors in Chinas onshore stock markets have borrowed to sell short reached 151.9 billion yuan 23.43…