Chinese shares opened flat with a negative bias on Monday amid signals of policy support and growing skepticism on massive global spending on artificial intelligence.
The Shanghai Composite Index, the main gauge of Chinese stocks, ticked down 0.58 of a point to 4,026.69. The Shenzhen Component Index inched down 0.43 of a point to 15,782.22.
The People's Bank of China will increase the overnight reverse repurchase operation in its open market operations by the end of June, with the operation to adopt a fixed interest rate and quantity bidding. The new rate will be an addition to the central bank's regular seven-day reverse repo rate that has served as the main policy benchmark since 2024.
The move is a major step toward aligning with U.S. policy rate structures, with analysts saying anything at 1.25% or below would amount to a de facto PBOC rate cut.
Meanwhile, markets are demanding more tangible monetization for AI companies, as investors are questioning whether funneling vast amounts of capital into the industry can justify stretched valuations in an uncertain macro environment.