Chinese A-shares fell in volatile trading, with the Shanghai Composite Index dropping below 3,900 points and the ChiNext Index losing over 3%. Lithium mining stocks led the decline, while shipbuilding, agriculture, and aquaculture sectors bucked the trend. The lithium battery supply chain, computing hardware, solar energy, and memory chip sectors were among the worst performers. In Hong Kong, most commodities declined, with lithium carbonate futures plunging more than 8%.
On November 21, the A-share market adjusted collectively in the morning session. By midday, the Shanghai Composite Index fell 1.88%, the Shenzhen Component Index dropped 2.72%, and the ChiNext Index tumbled 3.18%. Over 5,000 stocks across the Shanghai, Shenzhen, and Beijing markets declined, with half-day turnover reaching 132 million shares. The defense sector remained active, with stocks like Jiuzhouyang and Longxi Co. hitting the limit-up. Agriculture and aquaculture stocks also rose, with Quanyin Hi-Tech and China Fisheries surging. On the downside, lithium mining stocks plunged, with Ganfeng Lithium and Sinomine Resource among the biggest losers. Memory chip stocks also weakened, with Demingli and Dawei Co. falling sharply. Key index performances:
- Shanghai Composite: 3,857.24 (-1.88%) - Shenzhen Component: 12,627.85 (-2.72%) - ChiNext: 2,945.61 (-3.18%) - CSI 300: 4,476.40 (-1.94%) - STAR 50: 1,293.51 (-2.61%) - CSI 500: 6,873.56 (-2.67%) - CSI 1000: 7,132.86 (-2.83%)
Hong Kong stocks also declined, with the Hang Seng Index down 2.07% (535 points) at 25,300 and the Hang Seng Tech Index dropping 3.11%. Tech stocks dragged the market lower, while Apple suppliers, semiconductors, lithium battery stocks, automakers, and oil shares weakened. Solar glass and biopharma stocks saw some gains.
Market sentiment was dampened by reduced expectations of a Fed rate cut following the U.S. Labor Department's report. Despite Nvidia's strong earnings, investors continued selling riskier assets, leading to an overnight slump in U.S. stocks. Asian markets, including Japan and South Korea, also opened lower.
Commodities mostly declined, with new energy materials leading losses. Lithium carbonate futures fell 8.02%, while precious metals weakened, with silver futures down 3.23%. The Guangzhou Futures Exchange adjusted trading rules for lithium carbonate contracts, and industry associations proposed cost-based pricing guidelines to curb excessive competition in the lithium iron phosphate sector.
In bonds, the 30-year futures contract fell 0.24% to 115.650, the 10-year contract dropped 0.03% to 108.440, the 5-year contract declined 0.06% to 105.855, and the 2-year contract edged down 0.01% to 102.444.
Key intraday updates: - 11:16: Lithium carbonate futures hit limit-down (-9%). - 10:47: Shanghai Composite down over 2%, Shenzhen Component -2.88%, ChiNext -3.27%. Nearly 5,100 stocks declined. - 10:39: FTSE China A50 futures extended losses to 2%. - 10:28: ChiNext Index fell over 3%. - 10:20: Lithium mining stocks led declines, with Dazhong Mining, Shengtun Lithium, Rongjie Shares, and Jinyuan Co. hitting limit-down. Lithium carbonate futures briefly dropped over 7%.
Daiwa Securities maintained a cautious outlook on lithium prices, forecasting a range of 75,000–90,000 yuan/ton in 2024, with limited upside from current levels (85,000 yuan/ton). Weak demand during Lunar New Year and a seasonal slowdown in global EV sales were cited as near-term pressures.
Earlier: - 9:30: Treasury futures mostly opened higher. - 9:28: CSI Convertible Bond Index opened 0.27% lower. - 9:26: Shanghai Composite opened at 3,896.66 (-0.87%). - 9:21: Hang Seng opened 1.45% lower; NIO (-5%), Lenovo (-5%), Bilibili (-4%), SMIC (-3%). - 9:16: CNY midpoint strengthened 30 pips to 7.0875. - 9:10: Lithium carbonate futures fell over 7%. - 9:00: Commodities opened lower, with fuel oil, crude, pulp, and silver futures down over 1%. FTSE China A50 futures fell 0.92%.
