SHANGHAI, Sept 18 (Reuters) – China stocks staged a strong finish on Friday, led by heavyweight financials on hopes of fresh supportive measures to boost the virus-ravaged economy, while a strong yuan also helped lure foreign inflows.

** The blue-chip CSI300 index ended up 2.3% at 4,737.09, while the Shanghai Composite Index rose 2.1% to 3,338.09.

** For the week, CSI300 and SSEC both gained 2.4%, snapping a two-week losing streak.

** Leading the gains on Friday, the CSI300 financials index jumped 3.9%, while the CSI300 banks index added 2.1%.

** Market participants could be expecting more fiscal measures to boost the economy, said Yan Kaiwen, an analyst with China Fortune Securities.

** China’s industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve more broadly from the coronavirus crisis. [nL4N2FF26S

** Yan also noted the yuan’s strength that helped lift the appeal of Chinese assets.

** China’s yuan firmed on Friday, resuming its march against the dollar and putting the currency on course for an eighth straight week of gains after weak U.S. data pulled the greenback lower.

** Investors on Friday purchased a net 12.2 billion yuan ($1.81 billion) worth of China shares via the Stock Connect linking mainland and Hong Kong which allows foreigners access to the A-share market, according to Refinitiv.

** Though tensions between China and the United States remains a concern for investors.

** China will make a “necessary response” to a visit by U.S. Undersecretary for Economic Affairs Keith Krach to Chinese-claimed Taiwan, and has lodged a complaint with Washington, the foreign ministry said on Thursday ahead of his arrival.

** Investment between the United States and China tumbled to a nine-year low in the first half of 2020, hit by bilateral tensions that could see more Chinese companies come under pressure to divest U.S. operations, a research report said.

$1 = 6.7538 Chinese yuan Reporting by Luoyan Liu and Andrew Galbraith, Editing by Sherry Jacob-Phillips