Chinese stocks post weekly and monthly gains ahead of the National Conference
Chinese stock markets saw mixed performance across their main indices at the close of trading on Friday, but still managed to achieve overall weekly and monthly gains. This performance comes as investors focus on Beijing, where hopes are pinned on the outcomes of the National People's Congress scheduled for next week, which is expected to include new stimulus packages specifically targeting the technology and innovation sectors.
Performance of indices and sectors
In trading details, the CSI 300 index, which tracks the 300 largest companies listed on the Shanghai and Shenzhen stock exchanges, saw a slight decline of 0.35%, closing at 4,710 points. In contrast, the Shanghai Composite Index bucked the trend, rising 0.4% to close at 4,162 points. This performance enabled the Shanghai Composite Index to record weekly gains of 1.1%, further strengthening its positive trajectory over the monthly period.
Political and economic context: The importance of the National Conference
This year's National People's Congress holds exceptional significance that extends far beyond China's borders. Historically, this event has served as the primary platform for the Chinese government to unveil its economic growth targets for the new year, defense budgets, and monetary and fiscal policies. Analysts anticipate that the Chinese leadership will focus this year on bolstering technological self-reliance in response to increasing global trade restrictions, which explains investor optimism regarding the stocks of technology and innovation companies that may receive direct government support.
Currency movements and their impact
In the currency markets, the Chinese yuan weakened against the US dollar, with the greenback rising 0.25% to trade at 6.8582 yuan. This move ended a ten-session winning streak for the Chinese currency. Economists believe this correction in the exchange rate could be beneficial for supporting Chinese exports, given the challenges facing global demand.
Analysts' views and investor confidence
In a related development, analysts from the global investment bank Morgan Stanley noted a marked improvement in market sentiment. The bank explained that investor confidence has begun to recover, driven by a renewed rebuilding of equity positions following the holiday season. The report also highlighted a shift in the behavior of state-linked funds, which have suspended the aggressive selling they had engaged in previously, thus creating a more stable price environment.
Regional and international impact
The stability and growth of the Chinese stock market have repercussions not only domestically but also for emerging markets and the global economy as a whole. The recovery of the world's second-largest economy strengthens global supply chains and supports commodity prices, making next week's decisions a matter of great interest to the international economic community.
