China Stepped Up Regulatory Support to Revive Market Sentiment, PBoC Held LPR Rates at Record Lows

Li Chen
20 Jul, 2026
Hong Kong

China's indexes rebounded sharply on Monday as authorities ramped up efforts to rebuild investor confidence and stabilize the country's stock market. 

The Hang Seng Index soared nearly 2%, and the mainland-focused CSI 300 Index gained 1.8% amid expectations of additional regulatory steps supporting market momentum. 

The state-controlled China Reform Holdings and China Chengtong Holdings increased their allocations to domestic Chinese corporations and vowed to expand holdings to help stabilize markets.  

The People's Bank of China held its loan prime rates steady for the 14th month in a row in July, with the one-year rate steady at 3.0% and the five-year rate at 3.5%. 

Last week, China's statistical agency confirmed that the economic growth slowed to 4.2% in the second quarter, and retail sales, property transactions, and fixed-asset investment lagged expectations. 

State-controlled media reported that securities regulators are preparing to meet with market participants to discuss measures that will support the stable development of capital markets.

Chinese policymakers have prioritized renewable energy products, electric vehicles, and artificial intelligence-linked products and services to lower dependence on imported energy and agriculture products. 

 

China Indexes and Stocks 

The Hang Seng Index jumped 1.9% to 25,034.97, and the mainland-focused CSI 300 Index rose 1.8% to 4,615.75. 

Benchmark indexes rebounded from last week's sharp losses amid a global rout in semiconductor- and AI-linked stocks. 

The Industrial and Commercial Bank of China rose 1.7% to HK $7.03, the Bank of China advanced 2.1% to HK $5.19, and the Agricultural Bank of China increased 2.8% to HK $5.84. 

Hong Kong Shanghai Bank Holdings plc decreased by 0.3% to HK$156.30.