China Stocks Mixed as Lujiazui Forum Concludes

The Shanghai Composite fell 0.5% to 4,089 on Thursday, reversing gains from the previous session, while the Shenzhen Component rose 0.6% to a one-month high of 15,978, as investors awaited further developments from the Lujiazui Forum, which concludes today. Among the key announcements, the PBoC signaled a potential shift toward using the overnight policy rate as its primary benchmark, aligning its monetary policy framework more closely with those of major central banks. Meanwhile, Vice Premier He Lifeng said Beijing plans to introduce anti-sanctions measures to counter what he described as unreasonable foreign restrictions. Technology stocks traded mixed, with Zhongji Innolight falling 0.3% and Eoptolink Technology losing 1%, while NAURA Technology rose 0.3%, Victory Giant added 1.5%, and Hygon Technology gained 0.6%. The divergence in AI-related stocks reflected an emerging pair trade, with investors favoring firms seen as leaders in China's AI race.

The Shangai Composite Index went up by 18 points or 0.44 percent on Wednesday to close at 4110 points. The rise was led by Power Construction Corporation of China (7.04%), Datang Intl (4.71%) and China Communications Construction (3.40%). On the downside, the weakerst performers were BAIC BluePark (-4.62%), Shaanxi Coal (-3.36%) and Yonghui Superstore (-3.35%).

The Shanghai Composite rose 0.4% to close at 4,108 on Wednesday, rebounding from the previous session’s decline, while the Shenzhen Component climbed 1.31% to 15,881, marking its third consecutive day of gains, as investors reacted positively to a series of key announcements made on the opening day of the Lujiazui Forum. The People’s Bank of China hinted that it may transition to using the overnight policy rate as its primary benchmark, replacing the current seven-day reverse repo rate. The move would align China’s monetary policy framework more closely with those of major global central banks, including the Federal Reserve. Meanwhile, Chinese Vice Premier He Lifeng said Beijing intends to strengthen its financial legal framework by introducing anti-sanctions measures designed to counter what he described as unreasonable foreign restrictions. Tech stocks led the gains, particularly Zhongji Innolight (2.25%), Eoptolink Technology (1.62%), and NAURA Technology (4.77%).