On August 3, the Chinese stock market experienced a decline, attributed to concerns over economic slowdown following weak manufacturing PMI (Purchasing Managers' Index) data.
On this day, the Shanghai Composite Index closed down 0.59% at 3,809.66, the Shenzhen Component Index fell 0.96% to 13,448.29, and the ChiNext Index dropped 1.24% to 3,302.55.
According to S&P Global, China's July manufacturing PMI was reported at 50.9, a significant drop from 51.7 in June and below the market expectation of 51.5. A PMI above 50 indicates economic expansion, while below 50 signals contraction. The Ratingdog PMI, which focuses on small and export-oriented enterprises, serves as a leading indicator for export performance. This decline raises concerns that exports, which have supported the Chinese economy, may weaken further. The consulting firm Ratingdog noted, "The growth in new orders has slowed, production increases have also decelerated, and the recovery in domestic demand is lagging."
Additionally, the National Bureau of Statistics reported that the manufacturing PMI for July was 49.2, marking a five-month low. This figure is down 1.1 points from June's 50.3 and below the market expectation of 50.0. The bureau explained that the PMI fell as some manufacturing sectors entered their traditional off-peak production period.
The global AI sector's adjustment also negatively impacted the Chinese stock market, with sectors such as semiconductors, optical communications, AI servers, and data centers showing weakness.
In a report, Chinese financial institution Zhongjin stated, "This month, companies will sequentially release interim performance reports, and positive results will strengthen the fundamentals of the stock market. Compared to major overseas markets, the valuation of the Chinese stock market remains attractive, suggesting a gradual upward trend for the market."
Notably, the nuclear power sector saw significant gains, with companies like China National Nuclear Corporation, Longfa Nuclear Power, and Libote hitting their upper price limits. This surge followed the news that the State Council approved plans for the construction of eight nuclear power plants during a meeting on July 31. China is accelerating its nuclear power construction, having approved a total of 64 nuclear power projects since 2019. As of the end of April this year, there were 62 operational nuclear reactors in China, with expectations that this number will reach 70 by the end of the year.
Power grid companies also performed well, with Jiusheng Electric and Baili Electric reaching their upper price limits. Stocks surged following news that the scale of ultra-high voltage power grid construction in China from 2026 to 2030 will be double that of the previous five-year plan. Key policy initiatives include the construction of ultra-high voltage flexible direct current transmission and offshore renewable energy power grids.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7898 yuan, a decrease of 0.0004 yuan from the previous trading day, reflecting a 0.01% increase in the yuan's value.
* This article has been translated by AI.
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