China stocks end mixed as FDI declines, rare earth stocks jump
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Shanghai composite and Shenzhen component diverge
Chinese equities closed mixed on thursday, with the Shanghai composite index slipping 0.023% to 3,350.78, while the Shenzhen component index edged up 0.20% to 10,794.55. The market reaction was subdued after data showed foreign direct investment (FDI) fell 13% year-over-year in january, signaling waning foreign confidence in the chinese economy.
FDI slowdown and policy response
The commerce ministry reported that new foreign-invested enterprises declined by 7.8%, while total FDI inflows dropped to 97.6 billion yuan. In response, officials plan to visit foreign companies to understand their concerns, aiming to stabilize capital inflows. At the same time, commerce minister Wang Wentao strongly criticized U.S. tariffs, warning that they undermine China - U.S. trade cooperation.
People’s Bank of China keeps lending rates unchanged
The PBOC maintained its one-year loan prime rate (lpr) at 3.1% and the five-year lpr at 3.6%, opting for monetary stability amid uncertain economic conditions.
Rare earth stocks surge on new regulatory framework
Despite broader market softness, rare earth stocks outperformed, with rising nonferrous metals (600259) soaring 6% and China rare earth resources (000831) gaining 3%. The rally followed China’s move to open public feedback on new regulations to protect its rare earth industry, a sector of strategic importance amid ongoing global supply chain tensions.
Trading outlook
While weak FDI data weighs on investor sentiment, the rare earth sector remains a bright spot, with regulatory protections potentially fueling further gains. Shanghai composite support sits at 3,330, with resistance near 3,380-3,400. Global trade tensions and U.S. - China tariff disputes remain key factors that could drive volatility in the coming weeks.
Chinese equities closed mixed on thursday, with the Shanghai composite index slipping 0.023% to 3,350.78, while the Shenzhen component index edged up 0.20% to 10,794.55. The market reaction was subdued after data showed foreign direct investment (FDI) fell 13% year-over-year in january, signaling waning foreign confidence in the chinese economy.
FDI slowdown and policy response
The commerce ministry reported that new foreign-invested enterprises declined by 7.8%, while total FDI inflows dropped to 97.6 billion yuan. In response, officials plan to visit foreign companies to understand their concerns, aiming to stabilize capital inflows. At the same time, commerce minister Wang Wentao strongly criticized U.S. tariffs, warning that they undermine China - U.S. trade cooperation.
People’s Bank of China keeps lending rates unchanged
The PBOC maintained its one-year loan prime rate (lpr) at 3.1% and the five-year lpr at 3.6%, opting for monetary stability amid uncertain economic conditions.
Rare earth stocks surge on new regulatory framework
Despite broader market softness, rare earth stocks outperformed, with rising nonferrous metals (600259) soaring 6% and China rare earth resources (000831) gaining 3%. The rally followed China’s move to open public feedback on new regulations to protect its rare earth industry, a sector of strategic importance amid ongoing global supply chain tensions.
Trading outlook
While weak FDI data weighs on investor sentiment, the rare earth sector remains a bright spot, with regulatory protections potentially fueling further gains. Shanghai composite support sits at 3,330, with resistance near 3,380-3,400. Global trade tensions and U.S. - China tariff disputes remain key factors that could drive volatility in the coming weeks.