The Chinese stock market continued its downward trend on September 11, following a decline the previous day. The surge in oil prices has weakened the indices. The Shanghai Composite Index closed down 1.18% at 3,888.11, the Shenzhen Component Index fell 1.08% to 13,471.26, and the ChiNext Index dropped 0.49% to 3,322.04.
International oil prices have surged past $100 per barrel due to escalating tensions in the Middle East. Brent crude reached around $109 per barrel at one point on September 11. The rise in oil prices has been fueled by concerns over disruptions in oil transport as Yemen's Iran-aligned Houthi rebels seized a strategic point in the Red Sea.
This situation has heightened concerns about inflation in the United States. Market analysts are now estimating a 70% likelihood that the Federal Reserve will raise interest rates next week. Consequently, U.S. Treasury yields have also increased, with the 10-year note approaching 5% and the 30-year note rising to 5.38%.
According to the Shanghai Securities Journal, market experts suggest that the recent weakness in the Chinese stock market is more a result of external shocks affecting investor sentiment rather than fundamental changes in corporate performance or valuations. They noted, "In a situation where investors' long-term confidence in Chinese assets has not fully recovered, external negative factors can amplify short-term fears and follow-on trading."
On a positive note, the defense sector saw significant gains. Neimenggu Yiji (内蒙一机) hit its upper limit, while Beifang Changlong (北方长龙) and Changcheng Jun Gong (长城军工) also recorded substantial increases. Yinhe Securities reported that the operating cash flow of defense companies has improved significantly this year, and with large-scale deliveries of export products in the second half, the industry is expected to see rapid improvement in conditions, leading to clearer performance enhancements for these companies.
The power sector also experienced gains, with Mindong Power (閩東電力) and Jiangsu Xinneng (江蘇新能) reaching their upper limits. Projections suggest that future electricity consumption may exceed current market expectations, prompting a rise in related stocks. As power supply capability becomes a key variable in the future AI competitive landscape, the value of power assets is being reassessed.
Meanwhile, the People's Bank of China set the yuan's reference exchange rate at 6.7743 yuan per dollar, a decrease of 0.0023 yuan from the previous day, reflecting a 0.03% increase in the value of the yuan.
* This article has been translated by AI.
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