FX.co ★ China Stocks Struggle for Direction

The Shanghai Composite Index experienced a modest increase of 0.2%, climbing to over 4,140, while the Shenzhen Component Index saw a slight decline of 0.2%, settling at 14,410 on Monday. The contrasting performances among mainland stocks are attributed to the dual forces of increased regulatory scrutiny on speculative trading and the anticipation of new economic stimulus measures. Recently, regulatory authorities have intensified efforts to curtail market manipulation and high-frequency trading, in conjunction with heightened margin requirements as part of a broader strategy to mitigate risks within capital markets. Concurrently, China's central bank has signaled its readiness to implement reductions in banks' reserve requirement ratios and key lending rates within the year to ensure sufficient liquidity. On the international trade front, U.S. President Donald Trump issued a warning stating that Canada could face up to 100% tariffs if it enters into a trade agreement with China. In terms of individual market movements, Zijin Mining surged by more than 5%, driven by increasing gold and silver prices, whereas aerospace corporations such as China Aerospace and China Spacesat experienced sharp declines, falling by 8.8% and 8.2%, respectively, due to profit-taking activities.