Two Major Uncertainties Dig Up a Golden Pit

Under the influence of the overnight decline in U.S. stocks, the A-share market opened lower and moved down across the board this morning; hardly any rebound appeared during the session. Both the Shanghai and Shenzhen markets ended the day at their intraday lows. On the board, almost every sector was swimming in red. High-voltage fast-charging, BC batteries, controllable fusion, lab-grown diamonds, AI PCs & phones, glass-substrate packaging, advanced packaging and CPO concepts were among the worst performers; only sand-control, horse-racing, land-transfer, duty-free and grain themes managed tiny gains. Roughly 40 stocks hit the daily up-limit while about as many touched the down-limit. The ChiNext and STAR boards under-performed the main board, each plunging more than 3%.

Yesterday investors saw “red indices but withering stocks”; today the scene turned into “an autumn wind sweeping away fallen leaves”. Fewer than 1,000 stocks rose. The benchmark Shanghai index broke both its 5-day and 10-day moving averages in a single long black candle, while the ChiNext and STAR 50 indexes dropped more than 3%.

What is worth looking forward to is an important conference next week, when the heads of “one central bank, two regulators and one commission” will gather under one roof—especially the much-loved “Mum” (the PBOC). Whether this “Huashan sword-meeting” of China’s financial world can blow some policy warmth into the increasingly chilly market remains to be seen. Let’s wait and watch.