On September 2, 2024, the A-share market opened in the red. On Monday (2nd), the three major indexes of A-shares opened lower and trended downwards, with a rapid decline towards the end of the day, leading to a new phase of lows for the Shanghai Composite Index. At the close, the Shanghai Composite Index fell by 1.1% to close at 2811.03 points, the Shenzhen Component Index fell by 2.11% to close at 8172.21 points, and the ChiNext Index fell by 2.75% to close at 1536.95 points.
Overall, the market showed a general decline trend, with 823 stocks rising, 54 stocks hitting the daily limit up, and 4415 stocks falling. Among them, the shipbuilding, semiconductor, liquor, aerospace, pharmaceutical, and securities sectors experienced significant declines.
The total trading volume in the two markets decreased by 170.856 billion yuan compared to the previous trading day, with a total turnover of 7057.33 billion yuan.
According to the China Fund News, the A-share market plummeted, and market analysis generally points to three main reasons for the decline.
Firstly, in August, the Purchasing Managers’ Index (PMI) for the manufacturing sector was 49.1%, a decrease of 0.3% from the previous month, indicating a slight decline in the manufacturing sector. When looking at the enterprise scale, the PMI for large enterprises was 50.4%, down by 0.1% from the previous month, medium-sized enterprises were at 48.7%, down by 0.7%, and small enterprises were at 46.4%, down by 0.3%. Among the five sub-indices that make up the manufacturing PMI, the production index, new orders index, raw material inventory index, number of employees index, and supplier delivery time index were all below the threshold.
Secondly, the reasons for the stock market’s rise last Friday (August 30) were proven false today.
On September 2, Wang Liang, the president of China Merchants Bank, stated that there was no official opinion from the macro-management department of the People’s Bank of China or the China Banking and Insurance Regulatory Commission on the policy regarding loan transfers. This policy has not been confirmed and is merely based on rumors in the media. If this policy were to be implemented, it would have a certain negative impact on the existing mortgage rates of commercial banks.
Recent reports from foreign media have suggested that the Chinese authorities are considering further lowering existing home loan rates, allowing up to 38 trillion yuan worth of existing home loans to be transferred to lower mortgage rates to reduce household debt burdens and boost consumption.
“Daily Economic News” reports that the hard-earned popularity of A-shares has once again been dispersed. If there are no further policies like transferring existing home loans or other major economic stimulus measures introduced in the short term, the market is likely to continue in a weak and volatile trend.
Thirdly, a new “curse” has emerged in the A-share market circles. This “curse” refers to a new pattern that has emerged in the market in the past three months. At the end of June, July, and August, there were large positive trends on the last trading day of the month, followed by almost a month of negative trends.