China Stocks Split After PBOC Decision

The Shanghai Composite edged down 0.2% to 4,084 on Monday, while the Shenzhen Component gained 0.6% to a more than one-month high of 16,120, as investors returned from a holiday and assessed the PBOC’s decision to keep key lending rates unchanged at record lows for a thirteenth straight month. The one-year loan prime rate (LPR) remained at 3%, while the five-year LPR stayed at 3.5%, reflecting caution as Middle East tensions and mixed economic data cloud the growth outlook. Meanwhile, Hong Kong is discussing with Chinese authorities plans to widen cross-border investment channels and allow mainland investors to participate in local IPOs, following Beijing’s recent crackdown on unauthorized offshore trading and non-compliant retail accounts. Financial stocks lagged, with losses in Industrial and Commercial Bank of China (-0.4%), Agricultural Bank of China (-0.6%), and China Construction Bank (-0.4%). In contrast, NAURA Technology (2.6%) and Luxshare Precision Industry (1.1%) advanced.

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