09.07.202602:07:03UTC+00China Stocks Rebound on Dovish PBOC Signals

The Shanghai Composite edged up 0.2% to 3,978 and the Shenzhen Component advanced 0.5% to 15,020 on Thursday, rebounding from one-month lows after the People's Bank of China reaffirmed its accommodative policy stance. The central bank indicated it will keep monetary policy appropriately loose and increase financial support to bolster domestic consumption, while noting a persistent imbalance between robust supply and subdued demand.

The PBOC has so far left benchmark interest rates and banks’ reserve requirement ratios unchanged, instead prioritizing refinements to its policy framework and transmission channels.

On the data front, annual consumer inflation slowed to a three-month low of 1.0% in June from 1.2% in May, while producer prices accelerated to 4.1% from 3.9%, marking the fastest increase since July 2022.

Technology shares led the advance, with gains in Zhongji Innolight (3.3%), Eoptolink Technology (2.9%), and NAURA Technology (2.7%). Energy stocks also strengthened, supported by PetroChina and CNOOC, both up 1.2%.