China Stocks Maintain Momentum Amid Economic Optimism

China's stock market sees mixed results but holds near a decade high, driven by increased trading volumes and corporate profit growth expectations. The Shanghai Composite hits its highest since 2015, bolstered by economic policies and industrial gains, while Hong Kong shares face a slight decline after previous gains.

China's stock market performance was mixed on Wednesday, maintaining levels unseen for over a decade. This trend was primarily supported by heightened trading volumes and optimistic expectations for corporate profit growth. In contrast, Hong Kong shares experienced a decline following a three-day rally.

The Shanghai Composite Index posted a modest 0.1% gain, crossing the important 4,000-point mark for the first time since July 2015. Meanwhile, the blue-chip CSI300 index recorded a 0.3% drop, and Hong Kong's Hang Seng index fell by 0.9%. In a promising development, Goldman Sachs projects a 20% rise for MSCI China and a 12% increase for the CSI300 in 2026, largely driven by earnings growth.

As part of economic policies aimed at stabilizing the market, China's central bank announced plans to reduce the reserve requirement ratio and interest rates in 2026. This move is expected to maintain ample liquidity and ensure a supportive monetary policy environment. Investors are also keenly awaiting the release of China's inflation data this Friday, which could provide insights into domestic demand trends.

(With inputs from agencies.)