The Chinese stock market rebounded slightly on October 16 after a previous decline, though the gains were modest. The Shanghai Composite Index closed up 0.24% at 3,716.28, while the Shenzhen Component Index fell 0.12% to 11,802.46, and the ChiNext Index dropped 0.39% to 2,772.38.
During the day, the market initially rose but turned downward in the afternoon as new buying pressure failed to materialize, leading to a sell-off. However, buying interest returned toward the end of the trading session, allowing for a slight recovery.
China's major financial institution, Zhongjin Securities, attributed the market's challenges to external negative factors and liquidity concerns. The firm identified three main issues: rising inflation and interest rate fears in the U.S., risk-averse sentiment due to volatility in Asian markets, and skepticism regarding the profitability of AI investments. The U.S. Consumer Price Index (CPI) for September exceeded market expectations, raising concerns about potential interest rate hikes. High U.S. Treasury yields can pressure growth stocks, which are heavily influenced by future growth expectations. Additionally, fluctuations in the South Korean and Japanese markets have heightened risk aversion, while investors are adopting a wait-and-see approach ahead of earnings reports from global AI companies. Zhongjin Securities noted, "With trading activity low and insufficient new capital inflow, it will be difficult for the rebound to sustain itself."
Defense companies showed strong performance on this day. Stocks such as Hangfa Technology, Changcheng Military Industry, and Xinxing Equipment hit their daily price limits. This surge was fueled by news of the upcoming 16th China International Aviation and Aerospace Exhibition, scheduled to take place in Zhuhai, Guangdong Province, from December 7 to 13. The exhibition is expected to be the largest ever, with expanded international cooperation and a broader range of displays and demonstrations, including various new equipment from the Chinese Air Force and Navy.
Shares related to Urban Air Mobility (UAM) also saw gains. Jin Dun Gu Fen and Xiamen Xinda reached their daily price limits following the unveiling of Tesla's second-generation Roadster supercar, which showcased its ability to climb nearly vertical walls and land like a rocket. Elon Musk, CEO of Tesla, announced plans to begin production of the Roadster in 2028.
Meanwhile, the People's Bank of China set the yuan's central parity rate against the dollar at 6.7220 yuan, a decrease of 0.0033 yuan from the previous day, reflecting a 0.05% increase in the value of the yuan.
* This article has been translated by AI.
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