China's stocks closed lower Friday on concerns that the central government might raise the bank reserve requirement ratio again over the weekend.

The benchmark Shanghai Composite Index closed down 27.17 points, or 0.93 percent, to end at 2,899.79.

The Shenzhen Component Index fell 1.37 percent, or 175.22 points, to finish at 12,613.11 points.

Combined turnover shrank to 258.7 billion yuan (39.2 billion U.S. dollars) from 297.89 billion yuan the previous trading day.

Losers outnumbered gainers 619 to 273 in Shanghai and 926 to 329 in Shenzhen.

Stocks on Friday were trading lower largely because of market expectations that the People's Bank of China (PBOC), the central bank, might again set higher reserve requirements for commercial lenders, according to an analysis by Shandong Shenguang, a securities consultancy firm.

The PBOC last hiked bank reserve requirement ratios by 50 basis points on Jan. 14 after raising them six times last year to soak up liquidity and curb inflation, which remains stubbornly high and rose 4.9 percent in January.

China's major banks have to set aside a record 19 percent of their reserve and small and medium-sized banks must keep 15.5 percent of their deposits as reserves.

Agriculture-related stocks led declines on reports that the prolonged drought in China's wheat growing regions could persist through February.

Hunan Jinjian Cereals Industry Co., Ltd. fell 5.22 percent to 8.9 yuan; Fujian Sunner Development Co., Ltd. closed down by 4.12 percent to 37 yuan.

Stocks of property developers posted gains and losses after the nation's statistics authority announced Friday that property prices in 60 out of the nation's 70 major cities rose month on month.

China Vanke, the country's largest listed property developer, fell 0.24 percent to 8.35 yuan, while Poly Real Estate Group Co. edged up 0.08 percent to 12.98 yuan.

Most financial stocks fell. Bank of China fell 0.3 percent to 3.28 yuan. China Everbright Bank dipped 1.49 percent to 3.97 yuan.