China Stocks Mixed, Eye Solid Weekly Gains

The Shanghai Composite Index fell 0.3% to below 4,100, while the Shenzhen Component Index gained 0.3% to around 14,800 on Friday, with mainland stocks showing mixed performances as investors await progress on extending the US-Iran ceasefire. Still, both benchmarks remain on track for a solid second straight weekly gain amid growing optimism over a potential deal to permanently end the conflict. However, the Strait of Hormuz remains effectively closed under a dual blockade, and concerns remain that restoring a meaningful portion of disrupted oil and gas output could take up to two years. In China, the policy outlook remained cautious despite a strong Q1 GDP growth, as supply disruption and high oil prices pose risks to China’s exports. Markets now await the PBOC’s upcoming interest rate decision next week. Among individual stocks, Zhongji Innolight (+5.3%) and Foxconn Industrial (+2.8%) outperformed, while Kweichow Moutai (-3.6%) and Contemporary Amperex (-2.2%) led the declines.

The Shanghai Composite Index rose 0.7% to end at 4,056, hitting a fresh four-week high, while the Shenzhen Component climbed 2.1% to 14,796 on Thursday, rebounding to its strong January 2022 level, as better-than-expected first-quarter economic growth boosted sentiment. China’s economy expanded 5% in the first quarter, accelerating from 4.5% in the prior quarter and beating expectations, as stronger exports helped offset still-muted domestic demand. Activity data for March painted a mixed picture, with industrial production holding up better than expected even as retail sales softened and unemployment edged higher. On the geopolitical front, Israel is weighing a possible ceasefire in Lebanon, while US President Donald Trump said the broader war with Iran could end soon as efforts to extend a fragile truce and restart negotiations continue. Notable gains were seen from Contemporary Amperex (5.5%), Zhongji Innolight (3.8%), Foxconn Industrial (2.6%), BYD (2.4%), and Zijin Mining (1.1%).

The Shangai Composite Index went up by 30 points or 0.74 percent on Thursday to close at 4057 points. The rise was led by Aluminum Corporation of China (3.90%), Hengli Petrochemical (2.66%) and Yonghui Superstore (1.53%). On the downside, the weakerst performers were China Fortune (-2.14%), China CITIC Bank (-1.66%) and Greenland Holdings (-1.33%).