The Chinese stock market, which rebounded the previous day, fell again on September 17. The decline was attributed to the impact of the U.S. interest rate hike. The Shanghai Composite Index closed down 0.41% at 3,875.60, the Shenzhen Component Index dropped 0.33% to 13,409.91, and the ChiNext Index fell 0.40% to 3,298.31.
On September 16, the U.S. Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4.00%. This marked the first rate increase since July 2023. All 12 voting members of the Federal Open Market Committee (FOMC) supported the decision. Notably, the market is focused on the potential for further rate hikes. The median forecast for the year-end interest rate among 18 Fed officials is now 4.1%, up 0.3 percentage points from the June estimate, with 16 of the 18 officials expecting at least one more increase this year.
Luo Zhiheng, chief economist at Yuekai Securities, stated, "The Chinese stock market will be affected by the U.S. interest rate hike, but it may also show independent trends." He added, "The direction of the Chinese stock market will be more influenced by the fundamentals of the Chinese economy and industry rather than pressure from interest rate differentials. In the medium to long term, there is a possibility of additional economic stimulus measures, and as stabilization funds gradually flow into the market and corporate performance is quickly reflected, the market may withstand external shocks."
Yang Delong, chief economist at Qianhai Kaiyuan Fund, also assessed that the recent rate hike will not fundamentally impact the Chinese stock market. He noted, "The Chinese stock market has undergone significant adjustments in the third quarter, effectively completing the process of eliminating the tech bubble. The previous declines have largely priced in concerns over high valuations in the tech sector and the potential for U.S. Fed rate hikes."
On this day, the automotive sector showed strength, with stocks like Ankai Bus, Haima Automobile, and Zhongtai Automobile hitting their daily limits. Guangzhou Automobile announced plans to acquire a stake in a specific joint venture with DiDi through a new share issuance, which, upon completion, will make it the second-largest shareholder in Guangzhou Automobile. This joint venture is reported to be with Ichito Toyota. The market viewed this as a positive development signaling the start of restructuring in the automotive industry.
The leisure sector also saw gains, with Dalian Shengya reaching its daily limit and Changbai Mountain and Xiyu Travel recording significant increases. In China, there are only three working days between the Mid-Autumn Festival and the National Day holiday, and taking three days off can lead to a maximum of 13 consecutive days of vacation. According to data from travel platform Qunar as of September 16, bookings for flights and hotels during the National Day holiday this week increased by 56% compared to the previous week, with long-haul flight bookings over 2,000 kilometers doubling from the previous year.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7580 yuan, a decrease of 0.0048 yuan from the previous day, reflecting a 0.07% increase in the value of the yuan.
* This article has been translated by AI.
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