The three major A-share indices closed lower collectively
On November 6, the three major A-share indices closed lower collectively, with the Shanghai Composite Index falling 1.1%, and over 4,700 stocks across both markets declining.
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On November 6, the three major A-share indices closed lower collectively, with the Shanghai Composite Index falling 1.1%, and over 4,700 stocks across both markets declining.
A report released by Bloomberg Economics on November 6 stated that if the Democratic Party slows down AI investment and data center construction after a major victory in the U.S. midterm elections, China's growth, which relies on AI hardware exports, will be hit. Net exports contributed nearly 40% of China's economic growth in the third quarter, and chips and computer products accounted for 40% of the year-on-year increase in exports in the first nine months.
At the Bu Ming Bai Festival held in Tokyo, the Bu Ming Bai Podcast invited Professor Xu Chenggang to discuss the institutional logic behind China's economic growth and recession, as well as how ordinary people can cope, using his book 'The Institutional Genes' as a starting point.
As over 3,300 A-share stocks plummeted, the state-run China Fund News published an article attributing the correction to external factors such as the decline in the South Korean stock market, the drop in US tech stocks, and the midterm elections.
On November 3, over 3,300 A-share stocks fell, with semiconductors and optical modules suffering heavy losses. The STAR 50 index has retreated about 49% from its July high.
The Wall Street Journal reports that the Chinese stock market has entered a bear market, with Morgan Stanley warning of a potential further decline of 10% to 15% before hitting bottom, noting that state-backed fund purchases may only provide short-term support.
On November 3, China Fund News published an article citing external factors such as the decline in the South Korean stock market, the drop in U.S. tech stocks, and the U.S. midterm elections to explain the A-share correction. The related topic entered the top ten trending list on Weibo, drawing mocking comments from netizens.
On November 1, a financial blogger posted that an article published the previous night had been deleted. They suspected it was due to photos of stock investors' Halloween costumes at the end of the post, which included satirical content about A-shares, such as dressing up as green K-line charts or holding signs begging for market support.
Protective fences were installed around the buildings and passageways of the Shenzhen Stock Exchange and the Shanghai Stock Exchange around October 31, sparking speculation that they were intended to prevent gatherings or protests by petitioners or investors.
The day after the market conference concluded, A-shares fell sharply again, with the Shanghai Composite Index losing the 3600-point mark and hitting a new closing low for the year.
October 30 was the last trading day of October. The Shanghai Composite Index fell 1.44%, the Shenzhen Component Index fell 2.73%, the ChiNext Index fell 4.13%, and the STAR 50 Index fell 5.48%. Over 4,600 stocks across the market declined. For the month, the ChiNext Index fell by a cumulative 23.02%, and the STAR 50 Index fell by 24.13%.
On October 26, Bloomberg reported on a Morgan Stanley study saying that the Chinese stock market may not have bottomed out yet, and that offshore Chinese stocks could fall another 10%–15% before approaching historically low valuations, with weak economic consumption, pressure on e-commerce, and fears of tax-triggered selling of trusts intensifying the adjustment.
Bloomberg reported on October 25 that China's stock market has shrunk by about $3.5 trillion from its high earlier this year in May, with the CSI 300 index falling into a bear market the previous week, as weak consumption and price wars squeeze corporate profits.
On October 23, it was circulating online that due to the continuous decline of the stock market, an investor purchased a funeral wreath online, with the delivery address set to the Shanghai Financial Exchange Plaza and a note saying to hang it on the neck of the bronze bull at the exchange's entrance; the order has not been paid for yet because security at the entrance has been tightened.
October 22 is the deadline set by the Chinese government for declaring historical back taxes on offshore trusts. On that day, Chinese stocks officially entered a technical bear market, with the wealthy selling assets to pay the taxes, triggering selling pressure.