China equities gain on policy support hopes

Chinese equity markets ended mostly higher on Monday, with the Shanghai Composite rising 0.67% to its highest level in nearly a month, while the Shenzhen Component remained largely unchanged. Investor sentiment was supported by softer-than-expected inflation data, which strengthened expectations that policymakers may continue to provide support to the economy.

China's consumer inflation eased to 0.5% year-on-year in July, marking a six-month low, mainly due to lower food prices and slower growth in non-food costs. Producer price inflation also moderated to 3.5% from 4.1% in the previous month, indicating a gradual easing in price pressures across the economy.

The inflation data reinforced market expectations that authorities could maintain an accommodative policy stance to support economic growth. Policymakers have also reiterated their commitment to accelerating infrastructure spending to counter weak domestic demand, even as exports and manufacturing activity remain relatively resilient.

 

Among individual stocks, consumer and telecom names led gains, with Kweichow Moutai, China Mobile and Foxconn Industrial Internet advancing during the session. In contrast, several technology stocks underperformed, with Zhongji Innolight and Eoptolink Technology recording notable declines, reflecting continued sector-specific profit booking.

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