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SHANGHAI, Nov 26 (Reuters) - China stocks gave back early gains and ended lower on Thursday, as a retreat in small-caps in afternoon trading eclipsed a sharp rebound in resource shares.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.6 percent, to 3,759.43, while the Shanghai Composite Index lost 0.3 percent, to 3,635.55 points.
Trading in the market, which has bounced over 20 percent from its August low hit during the summer market rout, has become choppier ahead a batch of initial public offerings that will kick off next week.
But many traders say an improved outlook for the market has greatly reduced the risk of another sharp downturn.
Guotai Junan Securities and Shenwan Hongyuan Securities both painted a rosy picture for China's market in 2016 during their respective investor conferences this week.
Shenwan Hongyuan predicted that SSEC will rise to around 4,500 points next year, up 23 percent from the current level, as ample liquidity chase a small pool of strong assets.
But on Thursday, resources shares were the only bright spot in a generally sluggish market.
The CIS300 materials index advanced 1.3 percent, inspired by a surge in zinc prices, after China's major zinc smelters said they would slash output by 500,000 tonnes, or nearly a fifth, next year.
Shenzhen's start-up board ChiNext retreated from four-month highs, down 1.4 percent at close. (Reporting by Samuel Shen and Pete Sweeney; Editing by Shri Navaratnam)