On November 2, the Chinese stock market closed higher across the board, driven by expectations surrounding government stimulus measures. The Shanghai Composite Index rose 1.08% to close at 3,638.03, while the Shenzhen Component Index increased by 1.63% to finish at 11,010.68. The ChiNext Index saw a 1.87% gain, closing at 2,458.70.
According to the Shanghai Securities News, the People's Bank of China, the China Securities Regulatory Commission, and the National Financial Regulatory Administration convened major securities firms and fund management companies to discuss ways to utilize capital market support policies. On the same day, these three institutions also gathered major banks to discuss improvements to re-lending policies that support share buybacks and additional stock purchases by listed companies.
Re-lending is a liquidity supply measure introduced by Chinese authorities in 2024 to invigorate the capital market. It encourages financial institutions to provide loans to listed companies and major shareholders that meet certain criteria, thereby supporting share buybacks and additional stock purchases. According to China Business Network, a large state-owned bank plans to increase loan limits by 100 billion yuan each for two central state-owned asset management companies, China State-Owned Assets Supervision and Administration Commission (CSAM) and China Chengtong Holdings Group (CCHGTG), totaling 200 billion yuan (approximately $40.4 billion) for share buybacks and stock purchases.
Sheng Meng, a representative from Xiangsun Capital, told Bloomberg, "This meeting will have a positive short-term impact on the market, but such policy signals alone cannot change fundamental economic trends. To continuously improve the medium- to long-term outlook, structural reforms along with fiscal and industrial support policies are necessary."
Stocks related to short dramas saw significant gains on this day. Companies like Haikan Co. and Huashi Technology hit their upper price limits. According to state-run CCTV, around ten Chinese companies have established overseas short drama platforms. Additionally, over ten short drama applications have launched dedicated channels abroad, with Chinese firms accounting for nine of the top ten paid short drama applications.
The baijiu sector also performed strongly, with Huangtai Jiuye reaching its upper price limit and Shuijingfang recording substantial gains. The positive market impact is attributed to the strong performance of Kweichow Moutai, China's largest baijiu producer, which reported a third-quarter net profit of 19.951 billion yuan, marking a 3.78% increase year-on-year and a 15% increase from the previous quarter.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7146 yuan, an increase of 0.0008 yuan from the previous trading day, reflecting a 0.01% decline in the yuan's value.
* This article has been translated by AI.
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