Shanghai, Jan 26, 2026, 03:16 (GMT+8) — Premarket
- Bank of China’s Shanghai-listed A-shares fell again on Friday, marking their second straight session of losses.
- Fresh signals from China’s central bank have brought liquidity and rate expectations back into the spotlight.
- Traders are focused on China’s late-month data and whether policy support will continue.
Bank of China Ltd’s Class A shares (601988) ended Friday at 5.27 yuan, slipping 0.57%. The state-owned lender faces Monday’s session on a cautious note after a turbulent week for mainland financial stocks.
Timing is critical. Investors are once again assessing how aggressively Beijing might ease policy after China’s central bank indicated it can still lower interest rates and the reserve requirement ratio — the portion of deposits banks must hold in reserve — in a bid to keep borrowing costs down.
Easier policy presents a double-edged sword for big banks. It can boost loan growth and ease funding pressures, yet if loan rates drop quicker than deposit costs, lending margins may shrink.
Bank of China shares fluctuated between 5.26 yuan and 5.32 yuan on Friday, with roughly 247 million shares changing hands, according to Investing.com data. This came after a 0.56% drop the previous day.
The stock slid amid a mixed market backdrop. The Shanghai Composite ticked up 0.33% to close at 4,136.16, Xinhua reported. Meanwhile, the CSI 300 dropped 0.45%, ending at 4,702.50, per Investing.com’s historical data.
Policy watchers are closely monitoring liquidity flows. The People’s Bank of China announced a 900-billion-yuan, one-year medium-term lending facility (MLF) operation scheduled for Friday to ensure ample liquidity. The MLF allows banks to borrow from the central bank using collateral.
Rates are another factor. Last week, China held its benchmark loan prime rates steady, Reuters reported, with the one-year LPR at 3.0% and the five-year LPR at 3.5%. The one-year rate drives most loans; the five-year rate is crucial for mortgages.
The risk of credit stress linked to the property slump hasn’t disappeared. Reuters highlighted this week how rural banks are finding it tough to offload foreclosed homes, even with big discounts. It’s a stark reminder: solid collateral can quickly become a burden for lenders if the market remains sluggish.
Banks like Bank of China will be watching closely to see if China’s economy is strong enough to relieve some pressure on policymakers and borrowers. The National Bureau of Statistics has the official PMI report scheduled for release on Jan. 31 at 9:30 a.m. local time. That number often influences rate forecasts and shifts in sector bets.
