The Shanghai Composite rose 0.9% to 4,000 on Friday, while the Shenzhen Component climbed 2% to 14,282, with both indices on track for strong weekly gains despite the central bank’s cautious easing stance amid mixed inflation data. Annual CPI slowed more than expected to 1% in March 2026 from 1.3% in February, while producer prices rose 0.5%, beating forecasts and marking the first increase since late 2022, partly reflecting higher global energy costs amid Middle East tensions. While China’s strategic reserves and diversified energy supply have cushioned external cost pressures, signs of domestic pass-through are emerging, as authorities raised retail fuel prices for the third time since late February. Against this backdrop, the PBoC still maintained its cautious stance at a quarterly meeting last month, signaling limited appetite for aggressive easing after a modest rate cut in 2025. Tech stocks remained strong, led Zhongji Innolight (3.7%) and Eoptolink Technology (3%).
