China Stocks Rise on Deal Hopes, Tech Rally

The Shanghai Composite rose 0.5% to 4,183 on Thursday, while the Shenzhen Component Index climbed 1.5% to 15,810, buoyed by renewed hopes surrounding US-Iran peace negotiations and strength in technology stocks. President Donald Trump said negotiations with Iran were in the “final stages,” easing concerns about energy-driven inflationary pressures. Technology stocks provided additional momentum after Nvidia posted better-than-expected fiscal Q1 results and issued a robust sales outlook for Q2. Among tech stocks, notable gainers included Hygon Information Technology (7%), Contemporary Amperex Technology (1.2%), Zhongji Innolight (2.2%), and Victory Giant Technology (2.4%). Meanwhile, Chinese President Xi Jinping is reportedly expected to visit North Korea as early as next week, marking his first trip there in seven years and underscoring warming ties between the longtime allies, which recently resumed cross-border train and air services.

The Shangai Composite Index decreased 4 points or 0.10 percent on Wednesday to close at 4165 points. The decline was led by Datang Intl (-10.02%), Zhejiang Zheneng (-10.00%) and Huaneng (-4.60%). On the upside, the strongest performers were China Fortune (3.60%), Aluminum Corporation of China (2.62%) and China Merchants Securities (1.67%).

The Shanghai Composite fell 0.18% to 4,162 on Wednesday, while the Shenzhen Component was flat at 15,570, as a global bond selloff weighed on market sentiment. Surging oil prices and persistent inflation concerns tied to the prolonged Middle East conflict pushed global bond yields to multi-year highs, with the 30-year US Treasury yield reaching its highest level since 2007. On the monetary policy front, the People's Bank of China kept benchmark lending rates unchanged for a twelfth straight month in May, leaving the one-year loan prime rate at 3.0% and the five-year LPR at 3.5%. The decision underscored policymakers’ cautious stance amid uncertainty related to the conflict, even as consumer and producer inflation accelerated due to higher energy costs and supply chain disruptions. Financial stocks were among the biggest laggards, particularly Industrial and Commercial Bank of China (-1.79%), Agricultural Bank of China (-2.27%), and Bank of China (-2.06%).