CHINA'S key stock index fell as much as 1.2 percent in Friday's morning session, but the decline was narrowed with the rises in coal firms.

The Shanghai Composite Index fell 0.17 percent to 2,893.24 at the 11:30am noon break.

The heavily-weighted financial sector was weak on lingering concerns about tightening policies.

Bank of Communications Co lost 1.04 percent to 5.70 yuan (85 US cents) while Industrial and Commercial Bank of China Ltd fell 0.91 percent to 4.35 yuan.

China Shenhua Energy Co, the nation's biggest coal producer, advanced 2.16 percent to 25.58 yuan. Smaller producer Kailun Energy Chemical Co surged 8.85 percent to 19.19 yuan.

China State Construction Engineering Corp rose 0.29 percent to 3.48 yuan after saying it has won 16.9 billion yuan worth of contracts recently, equivalent to 6.5 percent of its 2009 revenue.

PetroChina Co declined 0.63 percent to 11.11 yuan. The company said it will buy the remaining 4.4 percent stake it doesn't own in a fuel oil unit from its parent for 392.3 million yuan. Rival Sinopec Corp was flat at 8.25 yuan.