On October 11, 2024, following the sharp fall on October 9, the A-share market staged another widespread decline on the 11th, with all three major indexes opening lower and continuing on a downward trend throughout the day. The Shanghai Composite Index fell by over 2.5%, briefly dropping below the key level of 3200 points, while the ChiNext Index plummeted by over 5.5%, and trading volume in both markets significantly decreased.
At the close of trading, the Shanghai Composite Index closed at 3217 points, down by 2.55%; the Shenzhen Component Index closed at 10060 points, a decrease of 3.92%; the ChiNext Index closed at 2100 points, a decline of 5.06%; and the STAR 50 Index fell by 5.79%, closing at 898.9 points. The total trading volume in the two markets amounted to 1.57 trillion yuan (RMB), a decrease of 571 billion yuan compared to the previous trading day’s 2.143 trillion yuan.
The market saw a widespread decline, with only 442 stocks experiencing gains, 51 stocks hitting their daily limit up, and 4862 stocks registering losses.
According to data from DZH VIP, a total of 50 stocks in both markets, including the bourses in Shanghai and Shenzhen, had gains exceeding 9%, while 283 stocks saw declines of over 9%.
The technology and new energy sectors experienced significant downturns, with the Sci-Tech Innovation 50 Index and the Dual Creation Index both plunging by over 5%. The defense industry sector led the decline, with companies like China Avionics Systems, Zhongxinheng Corp., and Andrew Well seeing notable drops. The semiconductor sector also suffered a major setback, with stocks like SMIC falling by over 7%. Additionally, companies in the new energy sector, such as EVE Energy and CATL, registered declines. The liquor stocks performed poorly, with Shede Wine Industry and Yanshi Stock dropping to their daily trading limits.
On September 24, the Chinese government introduced stimulus measures for the stock and housing markets, which led to a surge in A-share prices. However, on the first working day after the National Day holiday (October 8), the National Development and Reform Commission did not announce substantial positive policies during a press conference regarding the implementation of the “overall incremental” policy, instead reiterating previous policies, disappointing market expectations. This caused A-shares to rise and then fall, with Hong Kong stocks experiencing a significant drop of 2000 points.
Reuters reported that market analysts expressed disappointment at the National Development and Reform Commission’s press conference for not providing more details regarding significant stimulus measures in Beijing, leaving investors feeling let down.
The day after the NDRC press conference, A-shares plummeted, with the Shanghai Composite Index plunging by nearly 7% at one point and closing down by 6.62%, falling below the 3300-point mark and marking the largest single-day decline since February 2020, ending a 10-day streak of gains. The Shenzhen Component Index dropped by 8.15%, while the ChiNext Index fell by 10.59%, and the STAR 50 Index recorded a 12.11% decline, marking the largest single-day decline in history.
On the 10th, the market fluctuated throughout the day, with the Shanghai Composite Index rising by 1.32% and closing at 3301.93 points; the Shenzhen Component Index falling by 0.82% and closing at 10471.08 points; and the ChiNext Index declining by 2.95% and closing at 2212.91 points.
The trend of A-shares has left Chinese investors feeling uneasy.
Popular Weibo user “Stock Analyst Laoqi” remarked, “The current trading volume, compared to that on October 8, before the holiday, demonstrates how frenzied it was back then and how fearful it is now. Back then, many wanted to buy in, but now many want to sell out to avoid chasing highs and killing lows. We’ve experienced three days of chaos, with even the newbies cutting their losses and leaving. After this round of downturn, even if there’s an uptick afterwards, new investors won’t dare to use consumer loans; various loans would likely enter the market, perhaps the upper echelons prefer such ‘incremental changes.'”
Lawyer “Legal King Wang Kai” noted, “Economic laws cannot be broken by mere policies; the economy doesn’t improve overnight, and a stock market frenzy without a solid foundation is unsustainable. It may seem like flooding the country with money will cause prices to rise, but in reality, massive money injections only benefit the capital entities; retail investors, lacking information and resources, end up being sheared.”
“Class stratification affects both the housing and stock markets; ordinary people are often left holding the bag. While the stock market may recover, at least one can live in a house,” he added.
Some investors lamented, “Whatever encourages you to act is often to fill a hole; whatever forbids you from acting usually means someone benefits without sharing; whatever demands you to sacrifice everything, you are usually the price tag; whenever you are asked to consider the bigger picture, you are usually on the sidelines.”