FX.co ★ China Stocks Post Strong Monthly Gains

On Friday, the Shanghai Composite Index increased by 0.37% to close at 3,858, while the Shenzhen Component Index advanced by 0.99% to reach 12,696. This continued the previous session’s upward momentum amid a broadly strong market. Both indices also recorded significant gains for August, with the Shanghai Composite rising approximately 8% and the Shenzhen Component climbing 15%. The rally was driven by a reduction in US-China trade tensions, governmental measures to curb aggressive price competition, and abundant liquidity. Additionally, markets were buoyed by accelerating fund inflows, increased retail investor participation, and a rise in margin buying. Stocks in the artificial intelligence and semiconductor sectors led the charge, supported by renewed investor interest despite concerns over weak underlying fundamentals. However, Cambricon Technologies saw a 6% decline on Friday, ending a record rally after the AI chipmaker warned investors of risks following a sharp price increase. Trading in Dosilicon was suspended due to the company's warning about unusual stock price volatility.