Chinese stocks set for best week since 2008 on stimulus rollout
China’s CSI 300 surged 2.9% on Friday, taking the week’s gain to 14%—its best performance since November 2008—after Beijing accelerated stimulus to revive growth.
Source: Free Malaysia Today · July 21, 2026 at 8:31 AM · AI-assisted report
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KUALA LUMPUR, 21 JULY 2026 —
China’s CSI 300 surged 2.9% on Friday, taking the week’s gain to 14%—its best performance since November 2008—after Beijing accelerated stimulus to revive growth.
Market Impact
Hong Kong’s Hang Seng added 2.7% on the day and 12% for the week, its strongest showing since 2009, according to Reuters data. The gains lifted MSCI’s Asia-Pacific ex-Japan index 1.1% to its highest level since February 2022 and put it on track for a weekly advance of 6%.
The People’s Bank of China cut banks’ reserve requirement ratio by 50 basis points and reduced the seven-day reverse-repo rate by 20 bp on Friday. It also trimmed the 14-day reverse-repo rate by 20 bp for a second time this week, according to the central bank.
Nomura’s chief China economist Ting Lu said the speed of the stimulus suggested Beijing had shifted from piecemeal steps to a more aggressive approach. “Beijing seems finally determined to roll out its bazooka stimulus in rapid succession,” he said. “Beijing’s recognition of the severe situation and lack of success in a piecemeal approach should be valued by markets.” He added that deeper structural fixes, especially for the property sector, remained essential.
Reuters reported on Thursday that China plans to issue special sovereign bonds worth about 2 trillion yuan (US$284.43 billion) this year as part of the fresh fiscal push.
Commodities posted broad gains. Iron ore climbed another 1.8% to trade above US$100 per tonne, copper broke past US$10,000 per tonne, gold set a new record and silver reached a 12-year high. Brent crude, however, fell 0.8% to US$71.09 per barrel, extending its weekly decline to 4.6% on speculation Saudi Arabia may abandon its unofficial US$100 per barrel price target and increase output.
A softer oil outlook should aid global disinflation and support consumer spending, analysts said. In foreign exchange markets, the dollar strengthened 0.5% against the yen to 145.47, a three-week low for the Japanese currency ahead of Friday’s Liberal Democratic Party leadership vote. The contest pits candidates with differing views on fiscal and monetary policy, which could sway equities, Japanese government bonds and the yen, said Ray Attrill, head of FX research at National Australia Bank.
In US rates, two-year Treasury yields rose 6 bp on the week to 3.6287%, while 10-year yields gained 7 bp to 3.7943%, as lower-than-expected weekly jobless claims reduced bets on a half-point Federal Reserve rate cut in November. Markets now assign a 51% probability to such a move, down from 57% a day earlier.