SHANGHAI, Jan 20 (Reuters) - China stocks ended a volatile week on an upbeat note on Friday, as main indexes rose after data showing faster-than-expected economic growth fuelled blue-chips, while a surge in small-caps erased most of the losses earlier in the week.
The blue-chip CSI300 index rose 0.8 percent, to 3,354.89 points, while the Shanghai Composite Index added 0.7 percent to 3,123.14 points.
For the week, CSI300 was up 1.1 percent, while SSEC was up 0.3 percent.
At the end of a volatile week, market sentiment improved after China reported faster-than-expected 6.8 percent growth in the fourth quarter.
The data raised expectations of solid corporate results as markets also looked ahead to the looming earnings season.
Underpinning the positive tone was news that China's central bank injected a net 95 billion yuan ($13.83 billion) into money markets through open market operations on Friday, bringing total net injections this week to 1.13 trillion yuan, the biggest weekly injection on record.
On top of that, China's five biggest banks have been approved to temporarily lower the amount of cash that they must hold as reserves, to ease seasonal liquidity tightness ahead of the Lunar New Year holiday, sources told Reuters.
Still, some analysts were wary of the headwinds as Donald Trump prepared to be sworn in as the 45th U.S. president later in the day, with worries the New York billionaire could potentially spark trade friction with China during his term.
"The key risk is Trump's trade policy. The external risk of China is obviously heightened, at the same time how Fed will move policy rates in the U.S," said Raymond Yeung, chief economist of Greater China for ANZ in Hong Kong.
Sectors rallied across the board, led by healthcare and industry shares.
China's start-up tech-heavy ChiNext closed up 2 percent as recent sharp falls attracted bargain hunting. The index lost 1 percent for the week. (Reporting by Luoyan Liu and John Ruwitch; Editing by Shri Navaratnam)