On August 10, the Chinese stock market closed higher, driven by expectations of stimulus measures. The Shanghai Composite Index rose 0.67% to 3,966.59, while the Shenzhen Component Index increased by 0.04% to 14,316.96. The ChiNext Index, however, fell by 0.73% to 3,537.21.
According to the National Bureau of Statistics of China, the Producer Price Index (PPI) for July increased by 3.5% compared to the same month last year. This figure is lower than the 4.1% increase in June and the 3.8% forecasted by Reuters for July. The Consumer Price Index (CPI) for July rose by 0.5% year-on-year, falling short of the market expectation of 0.8% and the previous month's increase of 1.0%. The CPI also decreased by 0.1% from the previous month.
This data signals ongoing weakness in domestic demand and persistent deflationary pressures in China. With prices remaining low, analysts suggest that the Chinese government and the People's Bank of China have more room to implement economic stimulus policies. As expectations for measures such as interest rate cuts, liquidity support, and fiscal expansion grew, stock prices showed strength.
Additionally, the U.S. employment report released on August 7 indicated weaker-than-expected job growth, which is seen as a sign of reduced pressure for interest rate hikes from the Federal Reserve.
CITIC Securities noted in a report that the Chinese stock market is currently in a rebound phase due to overselling, stating, "The greater the decline last month, the more resilience we are seeing now." The report highlighted that technology stocks remain key assets, while sectors such as energy, chemicals, and non-ferrous metals are promising.
Notably, the food and beverage sector performed well, with companies like Yiming Food, Huangshi Group, and Xiangpiaopiao hitting their daily price limits. The news that snack exports from Quanzhou, Fujian Province, a major snack production hub in China, surged by 22.7% year-on-year in July contributed to this positive trend. Quanzhou is home to 378 snack processing factories, and snack exports to the EU increased by 270% year-on-year in July.
Shares in the pig farming sector also rose, with Yisheng Co. reaching its daily limit and Shennong Group seeing significant gains. Reports indicated that wholesale pork prices increased by 0.48% compared to the beginning of the month, prompting movement in related stocks. The Chinese pig farming industry is currently undergoing a supply reduction, with expectations of a significant rise in pork prices next year.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7884 yuan, a decrease of 0.0020 yuan from the previous trading day, reflecting a 0.03% increase in the value of the yuan.
* This article has been translated by AI.
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