The Chinese stock market successfully rebounded on July 23 after experiencing a decline the previous day. However, the recovery was limited due to ongoing geopolitical risks.
On this day, the Shanghai Composite Index closed up 0.25% at 3,876.78, the Shenzhen Component Index rose 0.44% to 14,123.31, and the ChiNext Index increased by 0.25% to 3,575.52.
The rise in the Chinese market was influenced by major U.S. tech companies announcing higher-than-expected capital expenditures related to artificial intelligence during their earnings reports. This led to improved investor sentiment in AI servers, semiconductor equipment, and related sectors, contributing to the overall market increase.
However, geopolitical factors, including U.S. airstrikes in Iran and attacks on oil tankers by Houthi rebels in the Red Sea, limited the extent of the gains. Rising risks in the Middle East pushed Brent crude oil prices above $96 per barrel, raising concerns about global inflation and economic slowdown. Additionally, the increase in oil prices has led to expectations that the U.S. Federal Reserve may maintain higher interest rates for a longer period.
The lithium sector showed strong performance, with companies like Guocheng Mining and Yongsan Lithium reaching their daily price limits. The price of lithium carbonate contracts on the Guangzhou Futures Exchange rose by over 4%, reaching 147,000 yuan per ton, which positively impacted the sector. Guojin Securities projected that lithium battery demand would increase by 28% year-on-year to 2,629 GWh this year, driven by surging demand for electric vehicles and energy storage systems.
The power grid sector also saw gains, with companies such as Shun Sodium and Hanlan Cable hitting their daily price limits. The news that State Grid Corporation of China announced the results of its third ultra-high voltage and transmission equipment bidding, with a total bid amount exceeding expectations at 6.3 billion yuan, stimulated related stocks.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7906 yuan, a decrease of 0.0027 yuan from the previous day, reflecting a 0.04% increase in the yuan's value.
* This article has been translated by AI.
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