Mainland Chinese stocks climbed on Thursday, with the Shanghai Composite Index reaching its highest level in a decade. The rally was fueled by sharp gains in fintech and stablecoin-related shares after a Reuters report suggested Beijing may be preparing a policy shift on digital assets.
At midday, the benchmark Shanghai Composite rose 0.35% to 3,779.52 points, its loftiest intraday level since August 2015. The blue-chip CSI300 gained 0.71%.
Fintech and stablecoin-concept stocks led the advance after Reuters reported, citing sources, that China is considering allowing yuan-backed stablecoins for the first time to promote broader global use of its currency.
Digital assets
If approved, the move would signal a significant change in Beijing’s approach to digital assets. China banned cryptocurrency trading and mining in 2021 due to financial stability concerns.
The CSI Fintech Theme Index climbed 2.1%. Brilliance Technology Co. surged by the exchange-allowed daily limit of 20%, while Tansun Technology Co. jumped 9.02%.
Chinese equities have been buoyed in recent weeks by easing U.S.-China trade tensions, improved liquidity conditions, and a shift by investors from bonds into stocks, analysts said.
James Wang, head of China strategy at UBS Investment Bank Research, noted that rising retail activity has been a key driver.
“Retail flows may have been one of the drivers, with trading volume up 80% year-on-year on A-shares and margin financing balances also rising sharply,” Wang said. “As retail participation typically increases following stronger A-share performance, this suggests more upside potential.”
In Hong Kong, the Hang Seng Index slipped 0.1% to 25,140.96 points, while the Hang Seng China Enterprises Index fell 0.32% to 8,984.22.
Across Asia, MSCI’s Asia ex-Japan index rose 0.34%, while Japan’s Nikkei lost 0.63%.
