The Chinese stock market, which had risen the previous day, fell on August 13. After starting the morning session with gains, the market reversed course in the afternoon as profit-taking surged. The Shanghai Composite Index closed down 0.50% at 3,926.96, the Shenzhen Component Index fell 0.87% to 14,288.44, and the ChiNext Index dropped 0.45% to 3,586.04.
Overnight, the U.S. Consumer Price Index (CPI) for July met market expectations. While the U.S. CPI showed an increase compared to the previous year, it did not deviate significantly from forecasts. This led to a decrease in the likelihood of a Federal Reserve interest rate hike in September. The probability of a rate increase in the U.S. futures market dropped from about 54% to around 40%. As concerns over Fed tightening eased, Asian markets, including China's, initially turned upward. However, the afternoon session saw selling orders emerge, resulting in a market decline.
Within the Chinese market, profit-taking was concentrated in sectors facing high valuation pressures. As buying momentum weakened in the afternoon, the market continued its downward trend.
In a report released on the same day, CITIC Securities stated, "The U.S. CPI for July met expectations, and core inflation continues to show a moderate trend, alleviating market concerns about inflation." They predicted that the Federal Reserve would likely keep U.S. interest rates unchanged for the remainder of the year, with potential adjustments in the following year depending on the CPI situation in the fourth quarter.
Notably, CRO (Contract Research Organization) stocks surged, with companies like Nanmo Biological and Boji Medical hitting their upper price limits. According to a report from Cailian, Chinese CRO firms possess competitive advantages in cost, response speed, and global delivery capabilities, with ongoing orders from overseas pharmaceutical companies. Additionally, as investments in domestic biotech ventures recover, the CRO industry is expected to thrive.
Food and beverage companies also performed well, with Huangshi Group and Yiming Food reaching their upper price limits. Reports of soaring milk tea sales from Chinese beverage franchises Luckin Coffee and Mixue Ice City contributed to this positive trend. On August 7, Luckin Coffee sold 25 million cups of milk tea in a single day, marking a record high. This surge is expected to drive up wholesale milk prices and improve the performance of dairy-related companies.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7888 yuan, an increase of 0.0006 yuan from the previous day, reflecting a 0.01% decline in the yuan's value.
* This article has been translated by AI.
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