Chinese shares closed mixed Friday with the financial sector showing strong performance.

The benchmark Shanghai Composite Index edged up 0.18 percent to close at 2,729.43, after losing 0.35 percent in the morning session.

The Shenzhen Component Index closed 0.2 percent lower at 8,484.74 points, despite a small rebound in the afternoon.

Trading remained thin, with the combined turnover on the two bourses standing at 239.18 billion yuan (about 34.75 billion U.S. dollars), shrinking from 252.2 billion yuan the previous trading day.

Financial sector led the gains with sub-index rising 1.11 percent.

The increase came after China's banking regulator decided to cancel and revise certain regulations on foreign investment in the banking sector on Aug. 23, a move to further open up the country's financial sector.

The banking industry registered strong growth. Ping An Bank rose 7.16 percent to close at 10.03 yuan, while Hua Xia Bank gained 3.66 percent to end at 7.64 yuan.

The ChiNext Index, China's NASDAQ-style board, lost 0.37 percent to close at 1,450.09.