The Chinese stock market, which had risen the previous day, fell on the 29th. Analysts attribute the decline to disappointing earnings from Alphabet, which also impacted Chinese technology stocks. On this day, the Shanghai Composite Index closed down 0.82% at 3,651.43, the Shenzhen Component Index fell 2.92% to 11,138.20, and the ChiNext Index dropped 4.45% to 2,517.59.
Reuters reported that concerns over cash outflows due to Alphabet's massive AI investment spending negatively affected the Chinese stock market. Rather than a loss of overall optimism in the AI sector, there is an increasing scrutiny on how much of the substantial AI investment costs can be recouped in actual sales and profits. In China, stocks related to AI infrastructure have also seen significant corrections, contributing to negative investor sentiment amid profitability debates surrounding U.S. tech stocks.
The China Business Network noted, "Valuation adjustments are widespread in the electronics and telecommunications sectors, which had risen on expectations of expanded AI investment," adding that there was notable selling pressure in electronics sectors such as optical modules and semiconductors, while dividend stocks and some defensive stocks performed relatively well. Huatai Securities stated, "As investor sentiment has turned cautious, trading volume in the Chinese stock market has significantly decreased," and projected that while the market is undergoing adjustments due to reduced trading and weakened investor sentiment, the bearish trend may conclude by late October or early November.
On this day, winter leisure-themed stocks showed strength, with companies like Iceberg Leisure and Longjiang Transportation hitting their upper price limits. According to booking platform Meituan, as of October 28, searches for 'skiing' on the platform increased by 125% compared to the same period last year. Reservations for accommodations within 5 kilometers of ski resorts from November this year to March next year also rose by 217% year-on-year, particularly driven by tourists from southern regions.
Coal stocks also saw gains, with Kailuan Group hitting its upper price limit and Haohua Energy recording significant increases. Guotai Junan Securities reported that China's national coal production in September recovered to 385 million tons, an increase of about 23.31 million tons from the previous month, and up approximately 42 million tons from the low of 340 million tons in July. Additionally, the winter coal stockpiling demand in northern China was identified as a factor supporting coal prices.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7147 yuan, a decrease of 0.0018 yuan from the previous day, reflecting a 0.03% increase in the yuan's value.
* This article has been translated by AI.
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