10.04.202602:55:13UTC+00China Stocks Set for Sharp Weekly Gains

The Shanghai Composite Index rose 0.9% to 4,000 on Friday, while the Shenzhen Component gained 2% to close at 14,282, with both benchmarks heading for solid weekly advances despite the central bank’s cautious approach to monetary easing amid mixed inflation signals.

China’s annual consumer price index (CPI) slowed more than expected to 1% in March 2026 from 1.3% in February. At the same time, producer prices increased 0.5%, beating forecasts and recording their first rise since late 2022. The rebound in factory-gate inflation partly reflects higher global energy prices amid heightened tensions in the Middle East.

Although China’s strategic reserves and diversified energy imports have helped buffer external cost pressures, early signs of domestic pass-through are emerging. Authorities have raised retail fuel prices for the third time since late February, suggesting that higher input costs are starting to filter through to consumers.

Against this backdrop, the People’s Bank of China maintained a cautious tone at its quarterly policy meeting last month, indicating limited willingness to pursue aggressive monetary easing following a modest rate cut in 2025.

Technology shares remained a bright spot, with gains led by Zhongji Innolight, up 3.7%, and Eoptolink Technology, up 3%.