FX.co ★ China Stocks Fall as Rescue Efforts Falter

The Shanghai Composite Index fell 1.2% to 3,595 on Tuesday, while the Shenzhen Component declined 0.2% to 10,998, as renewed attempts to revive 2024 stock market rescue measures failed to improve sentiment. The central bank said it would resume operations under its Securities, Funds and Insurance Companies Swap Facility (SFISF) “when necessary,” enabling eligible institutions to exchange assets for more liquid instruments in order to finance stock purchases, broaden market participation and reduce swap costs.

At the same time, the People’s Bank of China will cut its relending rate to 1% from 1.25%, make the facility permanent, and encourage banks to increase loans supporting corporate share buybacks and stake increases by major shareholders. However, these steps have so far failed to rekindle investor confidence amid ongoing economic weakness and uncertainty over corporate earnings.

AI-related hardware and PCB shares also came under pressure, led by Zhongji Innolight (-7.3%), Shennan Circuit (-4.8%), WUS Printed Circuit (-4.1%) and NAURA Technology (-1.9%).