The Chinese stock market, which had risen the previous day, fell across the board on July 24, attributed to the surge in oil prices stemming from the Middle East.
On this day, the Shanghai Composite Index closed down 1.61% at 3,814.20, the Shenzhen Component Index dropped 2.47% to 13,774.68, and the ChiNext Index fell 2.65% to 3,480.87.
Brent crude oil prices reached as high as $102 per barrel during the day before trading around $100. Concerns over oil supply disruptions have intensified following attacks on Saudi oil tankers by Houthi rebels in the Red Sea and difficulties in normal navigation through the Strait of Hormuz. Iran has rejected a U.S. ceasefire proposal, and the U.S. is reportedly expanding military actions against Iran, with plans for more intense attacks than in the past, contributing to the spike in international oil prices. This surge raises fears of a resurgence in global inflation, while expectations for interest rate cuts by the U.S. Federal Reserve have virtually disappeared, with the possibility of further rate hikes being discussed. The significant drop in big tech stocks on the U.S. market the previous day also negatively impacted the Chinese stock market.
Haitong Securities stated, "The stock market is expected to experience high volatility in the coming weeks, entering a period of severe turmoil. After a correction in mid-May, the Chinese stock market is likely to hit bottom and stabilize ahead of overseas markets. By August, the autumn market is expected to begin, and there is a possibility of a sufficiently positive market emerging."
On this day, the defense sector showed strong performance, with companies like Changcheng Military Industry and Jianjie Industrial hitting their upper limits. Expectations are rising that military conflict between the U.S. and Iran will escalate, increasing weapon demand from Middle Eastern countries, which led to a broad rise in China's defense sector. Additionally, there are expectations that the Chinese People's Liberation Army will benefit from policies aimed at accelerating military modernization.
The semiconductor equipment sector also performed well, with Zhichun Technology reaching its upper limit and Zhengfan Technology showing significant gains. According to a report from the Semiconductor Equipment and Materials International (SEMI), global semiconductor equipment sales are expected to reach $165.9 billion this year, a 23.2% increase from the previous year. Furthermore, global semiconductor equipment sales are projected to hit $229.5 billion by 2028.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7939 yuan, an increase of 0.0033 yuan from the previous day, reflecting a 0.05% decline in the yuan's value.
* This article has been translated by AI.
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