FX.co ★ China Stocks Rise as PBoC Holds Rates

The Shanghai Composite Index rose 0.5% to a one-month high of 4,071 on Monday, while the Shenzhen Component Index gained 0.6% to 14,975, its strongest level since December 2021. The advance came after the People’s Bank of China reiterated that it will maintain a “supportive” and “moderately loose” monetary stance aimed at sustaining economic growth while preserving currency and financial stability.

The one-year Loan Prime Rate was left unchanged at 3.0% and the five-year LPR at 3.5%, marking the eleventh consecutive month without adjustment and keeping both benchmarks at record lows. Although deflationary pressures have begun to ease and growth is gradually stabilizing, policymakers remain alert to external risks, particularly escalating geopolitical tensions in the Middle East.

Financial stocks led the gains, with Industrial and Commercial Bank of China up 0.7%, Agricultural Bank of China advancing 1.1%, and China Construction Bank Corporation climbing 1.5%. Other notable movers included Zhongji Innolight, up 2.5%, Midea Group, which added 1.5%, and Luxshare Precision Industry, gaining 4.3%.