05.08.202602:04:36UTC+00China Stocks Extend Gains

The Shanghai Composite rose 0.5% to 3,842 on Wednesday, while the Shenzhen Component added 0.5% to close at 13,948, extending the previous session’s gains amid growing optimism over a potential interim deal between Washington and Tehran. Qatar said on Tuesday that a proposal had been prepared, and both sides indicated progress in talks aimed at reopening the Strait of Hormuz.

Earlier Middle East tensions and the closure of the Strait of Hormuz had triggered an energy supply shock that helped pull China out of a three-year deflationary stretch, driving up producer and export prices before that reflationary impulse later eased.

On the economic data front, a private survey showed China’s Composite PMI slipped to a one-year low of 50.8 in July. The manufacturing PMI fell to a four-month low of 50.9, while the services PMI declined to 50.4, its weakest reading in nearly two years.

Among notable gainers were Foxconn Industrial Internet (+4.7%), Zijin Mining Group (+1.5%), CATL (+1.4%) and NAURA Technology (+2.8%).