The Chinese stock market, which had shown weakness earlier this week, rebounded on October 23. Analysts attribute this recovery to an influx of bargain buying. The Shanghai Composite Index closed up 0.89% at 3,690.48, the Shenzhen Component Index rose 2.79% to 11,673.83, and the ChiNext Index increased by 4.16% to 2,684.10.
On this day, the market initially experienced a decline in the morning session but turned around in the afternoon. Buying pressure, particularly in the new energy sector, contributed to the positive close. There was a rotation of funds from sectors that had previously surged to those that had seen relatively smaller gains, with solar, wind, and battery-related stocks performing strongly. The sectors related to wind, solar, and energy storage systems (ESS) also showed strength, as they have remained in the loss territory for cumulative returns since the beginning of the year, attracting bargain-hunting demand.
CITIC Securities noted, "The risks of U.S. interest rate hikes, volatility in international oil prices, geopolitical risks, and funding issues for global big tech companies are significant variables influencing the Chinese stock market. The weakening expectations for U.S. interest rate cuts could also pose a burden on risk assets, including those in China."
Among the notable performers, solar stocks surged significantly. Tongwei Co. and LONGi Green Energy Technology Co. hit their daily price limits. Expectations for alleviating oversupply and reducing price competition in China's solar industry drove this upward trend. If the industry successfully implements production adjustments and curbs low-price competition, it could lead to improved product prices and corporate profitability.
Additionally, baijiu companies saw strong gains. Brands such as Yingjia Gongjiu, Jinhuijiu, and Gujing Gongjiu recorded high increases. Market analysts suggest that the reduction in inventory among baijiu distributors has supported investor sentiment. Distributors in regions like Henan, Shandong, Guangdong, and Anhui have reported ongoing depletion of inventory in the baijiu distribution network. Some liquor retailers have seen their stock levels decrease by 10-20% compared to the same period last year, and the turnover rates for flagship products from well-known brands have increased.
Meanwhile, the People's Bank of China set the yuan's exchange rate against the dollar at 6.7180 yuan, a decrease of 0.0015 yuan from the previous day, reflecting a 0.02% increase in the value of the yuan.
* This article has been translated by AI.
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