The Shanghai Composite slipped 0.2% to 4,084 on Monday, while the Shenzhen Component rose 0.6% to 16,120, its highest level in more than a month. Trading resumed after a holiday, with investors reacting to the PBOC’s decision to leave key lending rates at record lows for a thirteenth consecutive month. The one-year loan prime rate (LPR) was held at 3%, and the five-year LPR at 3.5%, underscoring policymakers’ caution as Middle East tensions and mixed economic data weigh on the growth outlook.
At the same time, Hong Kong is in talks with Chinese authorities on expanding cross-border investment channels and allowing mainland investors to participate in local IPOs. The discussions follow Beijing’s recent crackdown on unauthorized offshore trading and non-compliant retail accounts.
Financial stocks underperformed, with declines in Industrial and Commercial Bank of China (-0.4%), Agricultural Bank of China (-0.6%), and China Construction Bank (-0.4%). By contrast, technology and manufacturing names fared better, including gains in NAURA Technology (2.6%) and Luxshare Precision Industry (1.1%).
