FX.co ★ China Stocks Slip as Rally Loses Steam

On Friday, the Shanghai Composite Index decreased by 0.26% to settle at 4,102 points, while the Shenzhen Component Index saw a 0.18% drop, closing at 14,281 points. This marked the fourth consecutive session of losses for mainland Chinese stocks, as the initial rally at the start of the year lost traction. Investor sentiment was adversely affected by concerns over regulatory changes. Specifically, Beijing announced an increase in the minimum margin requirement for stock financing, raising it to 100% from the previous 80%, effective January 19. This adjustment is part of a broader strategy aimed at mitigating excessive risk in the capital markets. Among the key stocks that declined were Zhongji Innolight, which fell by 1.3%, TBEA Co with a 2.7% decrease, China Spacesat dropping by 4.6%, China Aerospace declining by 4.2%, and Zijin Mining decreasing by 2%. In contrast, there is some optimism as China's central bank has signaled that there remains potential to lower banks' reserve requirements and reduce key policy rates within the year. For the week, the Shanghai Index experienced a slight decline of 0.45%, whereas the Shenzhen Index showed a gain of 1.14%.