Chinese equities kicked off the week on a strong note, with the Shanghai Composite gaining 1.5% to climb above 3,883, setting a new decade high, and the Shenzhen Composite advancing 1.8% to 2,436. Monday’s turnover reached 88.55 billion yuan, marking the most active trading session since November 2024, as investor confidence continues to rally. Meanwhile, turnover nearly reached 2 trillion yuan.
Renewed hopes stemming from better US-China relations, anticipation of further domestic policy easing, and buoyant sentiment have fueled a persistent bull run in Chinese markets. This surge follows Wall Street’s upbeat performance on Friday, after Federal Reserve Chairman Jerome Powell hinted at possible US interest rate reductions as early as next month.
Investors are now looking to China’s upcoming purchasing managers’ index and industrial profits data for further signs on the pace of economic recovery in the world’s second-largest economy.
Stocks with direct exposure to technology and digital finance led gains, particularly after a Reuters report suggested Beijing may allow yuan-backed stablecoins — a move that could pave the way for broader international adoption of its currency. If enacted, this would represent a significant policy reversal, as authorities have previously outlawed crypto trading and mining since 2021 over concerns for financial stability.
The ongoing shift from bonds to equities, improved liquidity conditions, and the prospect of fresh government stimulus have further underpinned the recent market optimism.
The possibility of greater flexibility in digital asset use signals a new chapter for China’s financial market landscape, with fintech and global investors watching closely for further regulatory developments.
