Chinese equities closed higher on Monday, 19 October, after better-than-expected economic data showed that growth strengthened in the third quarter of 2026. The figures provided some support for market sentiment, although weakness in parts of the technology sector and ongoing concerns over domestic demand continued to weigh on the outlook.
China’s gross domestic product grew by 4.5% year on year in the July to September quarter, up from 4.3% in the previous quarter and ahead of economists’ expectations of 4.4%. The latest reading brought growth closer to the government’s annual target of 4.5% to 5%, reducing some of the immediate pressure on policymakers to introduce additional stimulus measures.
The Shanghai Composite Index gained 0.4%, while the CSI 300 rose 0.1%. Bank shares helped support the domestic market, with traditional sectors outperforming some technology-related stocks. The technology-focused STAR 50 Index fell 2.2%, reflecting continued weakness in sentiment towards parts of the artificial intelligence chip supply chain.
Economic data released alongside the GDP figures offered further evidence of improving activity in some areas. Industrial output increased by 5.5% year on year in September, matching expectations and improving on August’s 5.2% growth. Retail sales rose by 1.1%, compared with 0.4% in August, exceeding forecasts and suggesting some improvement in consumer spending.
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