The People’s Bank of China has named continued stability of capital markets a priority for 2026 amid a global sell-off driven by worries over the Iran war. The statement was published on Thursday as the Shanghai Composite Index dropped 1.39 per cent.
The People’s Bank of China named the continued stability of the country’s capital markets as a priority for 2026, a goal taking on greater significance as global markets are tested by the reverberations of the escalating US-Israel war on Iran. Published on Thursday, the statement arrived at a turbulent moment for Chinese equities: by market close that day, the benchmark Shanghai Composite Index had dropped 1.39 per cent—hovering just above the 4,000-point mark—with nearly 5,000 stocks on mainland China’s exchanges ending the day at a loss. “For all central banks, there can be an adverse scenario where a more persistent supply shock feeds through to underlying inflation while still weighing on demand,” said Jennifer McKeown, chief global economist at Capital Economics, in a note on Tuesday. She noted that a gradual tightening of policy, complemented by targeted fiscal support for households and firms, is typically the most appropriate way to anchor inflation expectations without further suppressing economic demand. Keywords listed include Pan Gongsheng, Middle East, and US.
