FX.co ★ China Stocks Fall as PBOC Holds Rates

On Tuesday, the Shanghai Composite Index declined by 0.3% to approximately 4,100, while the Shenzhen Component Index dropped 1.7% to 14,050, reversing the gains of the previous session. This downturn followed the Chinese central bank’s anticipated decision to maintain its key policy rates, offering no fresh momentum for the market. Market participants are also dealing with intensified regulatory scrutiny as trading activities have climbed to unprecedented levels. This regulatory environment has resulted in increased margin requirements and the removal of high-frequency trading firms' servers from exchange data centers. In contrast, the Chinese government has indicated intentions to introduce additional fiscal and monetary measures to stimulate economic growth this year. Economic data made public on Monday indicated that China’s economy grew by 4.5% year-on-year in the fourth quarter of 2025, marking the slowest growth rate in three years. Nevertheless, the overall growth for the year reached the government's target of 5%. Leading the decline were technology stocks, including Eoptolink (-6.3%), Guangzhou Haige (-8.5%), Zhongji Innolight (-4.2%), and Zhejiang Sanhua (-1.3%).