Shanghai Stocks Surge to Decade High Amid Fintech and Stablecoin Boom

Mainland China's stock market experienced a significant rise on Thursday, with the Shanghai Composite index closing at its highest point in nearly a decade. The upward trend was largely driven by substantial gains in fintech and stablecoin-concept shares after a report by Reuters indicated a possible shift in Beijing's stance on digital assets.

Fintech and stablecoin shares were among the top performers, driven by speculation that China may permit the use of yuan-backed stablecoins for the first time. This move could potentially mark a pivotal change in the country's approach to digital currencies, following a ban on cryptocurrency trading and mining in 2021.

The rally in Chinese stocks is further bolstered by easing trade tensions between China and the United States, improved liquidity conditions, and increasing retail participation in the market. James Wang from UBS Investment Bank noted that retail flows are significantly impacting the market, with trading volumes and margin financing both seeing substantial increases.

(With inputs from agencies.)