The Chinese stock market continued its upward trend on November 5, with modest gains attributed to the effectiveness of government stimulus measures. The Shanghai Composite Index closed up 0.10% at 3,689.91, while the Shenzhen Component Index rose 1.19% to 11,471.09, and the ChiNext Index increased by 0.87% to 2,566.80.
Government measures to support the stock market have positively impacted investor sentiment, leading to a strong rebound in indices the previous day. Although profit-taking led to a decline in the morning session, buying interest surged in the afternoon, driven by optimism surrounding the stimulus initiatives.
Notably, policies encouraging share buybacks and support for major shareholders have shown tangible results. CXMT's chairman proposed increasing the company's share buyback program to as much as 5 billion yuan, while Zhongke Feicheng plans to initiate a buyback of up to 150 million yuan. Reports suggest that other large Chinese firms are also considering share buybacks, contributing to a favorable market atmosphere.
Huahuan Securities commented, "Institutional buying began in November, and the government's commitment to stabilizing the capital market is strengthening. With upcoming policy events such as the APEC summit and the Central Economic Work Conference in December, expectations for a market rally are building."
Solar energy stocks saw significant gains, with companies like Shichuang Energy, Zhongli Group, and Hongyuan Green Energy hitting their daily limits. According to third-quarter earnings reports, leading solar module manufacturers reduced their losses by 83% compared to the previous quarter, and energy storage systems (ESS) have successfully turned profitable. The prices of polysilicon remain stable, contributing to temporary price stability for wafers and solar cells, which has raised expectations for profitability recovery among intermediate solar industry suppliers.
Shares related to lithium batteries also showed strength, with Penghui Energy, Liyuanheng, and Haibosichuang each rising by over 10%. Citic Securities projected in a report that the lithium battery industry will enter a growth phase by 2027, with strong demand for automotive batteries expected to continue. The economic viability of ESS is also improving, leading to increased demand in both domestic and international markets. High-end battery products with technological competitiveness are anticipated to secure a technology premium.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7156 yuan, a decrease of 0.0024 yuan, reflecting a 0.04% appreciation of the yuan.
* This article has been translated by AI.
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