Major stock indices on the Chinese mainland edged slightly higher on Monday as traders responded to the release of largely positive economic data, said Timothy Pope, a China Global Television Network (CGTN) market analyst, who added that the Chinese securities regulator's recent initiatives had also had an impact on market sentiment.
The benchmark Shanghai Composite Index increased 0.29 percent to 4,114 points, while the Shenzhen Component Index closed 0.09 percent higher at 14,294.05 points.
Pope said that Monday's data showed that the Chinese economy had seen stable development momentum in 2025, strengthening market confidence.
"Today of course the focus was all on that economic data, and the reaction to that was a little bit mixed. The Shanghai Composite Index still eked out a gain of 0.3 percent, while the Shenzhen Component was up just fractionally, just 0.1 percent. But the good news of course is that GDP growth was on target, in line with projections and with last year at around five percent. Also China has managed really to navigate 2025's chaotic global trade environment so well. We saw that really strong growth in exports for the year. But we are still seeing those persistent weakness in domestic demand, retail and the property market and there has been a dip in fixed asset investment as well. So there's been a lot to factor in today," he said.
Pope pointed out that the Chinese securities regulator's recent move to moderate leverage levels and ensure financial stability had influenced market expectations.
"Also weighing on investors' minds are comments from the securities regulator on Friday, which signaled an intention to sort of cool down the recent A-share rally a little bit. The trading activity since late last year has really been exceptional, and the regulators seem to want to make sure it doesn't get overly frothy, so we've also seen the exchanges raise the margin requirements from 80 to 100 percent, in order to make sure that there's less of this speculative buying with borrowed funds. Because what we saw in 2025 really was a very strong year for A-shares, right from the beginning of the year when DeepSeek first became a global sensation, the markets were rising. There was obviously that Liberation Day fiasco when Donald Trump got out his tariff bingo board and slapped tariffs on everyone and penguins. But even that proved to be almost a blip when looked at in the context of the whole year on the markets. We started 2026 hitting fresh decade highs thanks to these AI and chip stocks and the intense rally we saw there. But the sense among analysts and traders is that perhaps the regulator views those as a little bit overheated right at the moment," he said.
Pope highlighted some top-gaining sectors and those industries which were marked by big losses.
"So all of that being the case, we did see a shift back towards more real economy stocks on Monday -- industrials, energy, utilities and materials firms. They were among the best-performing sectors today. And there was a noticeable drag from AI shares, the AI sector was down, and also from the financial sector where we saw banks lagging quite significantly as well," he said.
Chinese stocks close higher on positive economic data: market analyst
