The Shanghai Composite rose 0.2% to above 4,130, while the Shenzhen Component edged up 0.1% to 14,340 on Friday, with both benchmarks set to finish the week higher amid hopes for fresh policy support. China’s central bank signaled it will maintain a moderately loose monetary policy in 2026, using tools such as reserve requirement ratio cuts and interest rate reductions to ensure adequate liquidity. Markets are also watching for fiscal stimulus as Beijing contends with deflationary pressures, weak consumer demand, and a struggling property sector. Aerospace and clean energy stocks led the gains, including China Aerospace (+6.6%), China Spacesat (+5.3%), Goldwind Science & Technology (+8.2%), and Sungrow Power (+1.2%). Local equities were further supported by Wall Street, following US President Donald Trump’s reversal on proposed tariffs targeting European countries and the announcement of a framework agreement with NATO on a potential future Greenland deal.
