Chinese Stocks Fall Sharply Amid Tariff Concerns and Government Response
9 April 2025 路 Uncategorized 路
Source: 路 https://finance.technews.tw/2025/04/07/china-stock-market-0407/
Amid the trade war initiated by U.S. President Donald Trump, Chinese stock markets experienced a significant downturn today. The Shanghai Composite Index and Shenzhen Component Index closed sharply down at 7.34% and 9.66%, respectively; while the ChiNext Index plunged even further to -12.5%. Despite official intervention efforts aimed at stabilizing the market, trading volumes increased substantially, which somewhat cushioned the fall in the Shanghai Composite Index but failed to improve overall market sentiment.
In the last half-hour before closing, authoritative media outlets reported that China Central Huijin Investment Co., Ltd.鈥攁 state-controlled entity鈥攚as actively intervening to stabilize operations at 2:30 PM local time. Fifteen minutes prior to closure, the company officially declared its confidence in the future of Chinese capital markets and confirmed plans to increase investments in exchange-traded funds (ETFs) to maintain market stability.
Amidst a downturn triggered by news developments and official intervention efforts, the Shanghai Composite Index closed at 3096.58 points, down 245.43 points (-7.34%); the Shenzhen Component Index ended the day at 9364.5 points, falling 1001.23 points (-9.66%); and the ChiNext Index closed lower by 258.2 points to reach 1807.21 points or -12.5%. Trading volumes across Shanghai and Shenzhen stock exchanges reached approximately RMB 1,587.79 billion鈥攁n increase of about RMB 450.179 billion compared with the previous trading day.
Following Trump鈥檚 announcement on March 3 to impose reciprocal tariffs globally at midnight Taipei time, global stocks plummeted; however, Chinese markets initially avoided this initial wave due to a holiday break for Tomb Sweeping Day (April 4). Analysts had anticipated that China's market would experience a correction following its relative resilience during those days.
As Asian neighbors like Japan and South Korea experienced steep declines upon reopening their stock exchanges today, the opening of Chinese stocks saw significant gaps downward. The Shanghai Composite Index opened with an immediate drop of 4.46%, breaking below the psychological barrier at 3200 points; the Shenzhen Component Index started off lower by 5.96% and fell directly under the milestone mark of ten thousand points; and the ChiNext Index began trading plummeting even more sharply, down to -6.77%. Although these initial declines were not as severe compared with other Asian markets, disappointment-driven selling pressure quickly emerged, pushing indices further downward until midday when official support seemed to stabilize the market somewhat.
In the afternoon session, despite a brief stabilization period around 2:30 PM due to suspected intervention by state funds and subsequent announcements from China Central Huijin Investment Co., Ltd., pessimism returned as selling pressure intensified again, driving the Shanghai Composite Index towards -9% at one point before stabilizing closer to closing time.
Analysts in the Chinese securities industry generally agree that global markets are likely to remain weak due to Trump鈥檚 tariff measures and that given the significant tariffs imposed on China (over 60%-70%), manufacturing sectors will be severely impacted. The short-term outlook for stocks is expected to see a period of consolidation until further developments emerge from negotiations between the U.S. government, China, and other countries like the EU.
(Lead image source: Shutterstock)
In the last half-hour before closing, authoritative media outlets reported that China Central Huijin Investment Co., Ltd.鈥攁 state-controlled entity鈥攚as actively intervening to stabilize operations at 2:30 PM local time. Fifteen minutes prior to closure, the company officially declared its confidence in the future of Chinese capital markets and confirmed plans to increase investments in exchange-traded funds (ETFs) to maintain market stability.
Amidst a downturn triggered by news developments and official intervention efforts, the Shanghai Composite Index closed at 3096.58 points, down 245.43 points (-7.34%); the Shenzhen Component Index ended the day at 9364.5 points, falling 1001.23 points (-9.66%); and the ChiNext Index closed lower by 258.2 points to reach 1807.21 points or -12.5%. Trading volumes across Shanghai and Shenzhen stock exchanges reached approximately RMB 1,587.79 billion鈥攁n increase of about RMB 450.179 billion compared with the previous trading day.
Following Trump鈥檚 announcement on March 3 to impose reciprocal tariffs globally at midnight Taipei time, global stocks plummeted; however, Chinese markets initially avoided this initial wave due to a holiday break for Tomb Sweeping Day (April 4). Analysts had anticipated that China's market would experience a correction following its relative resilience during those days.
As Asian neighbors like Japan and South Korea experienced steep declines upon reopening their stock exchanges today, the opening of Chinese stocks saw significant gaps downward. The Shanghai Composite Index opened with an immediate drop of 4.46%, breaking below the psychological barrier at 3200 points; the Shenzhen Component Index started off lower by 5.96% and fell directly under the milestone mark of ten thousand points; and the ChiNext Index began trading plummeting even more sharply, down to -6.77%. Although these initial declines were not as severe compared with other Asian markets, disappointment-driven selling pressure quickly emerged, pushing indices further downward until midday when official support seemed to stabilize the market somewhat.
In the afternoon session, despite a brief stabilization period around 2:30 PM due to suspected intervention by state funds and subsequent announcements from China Central Huijin Investment Co., Ltd., pessimism returned as selling pressure intensified again, driving the Shanghai Composite Index towards -9% at one point before stabilizing closer to closing time.
Analysts in the Chinese securities industry generally agree that global markets are likely to remain weak due to Trump鈥檚 tariff measures and that given the significant tariffs imposed on China (over 60%-70%), manufacturing sectors will be severely impacted. The short-term outlook for stocks is expected to see a period of consolidation until further developments emerge from negotiations between the U.S. government, China, and other countries like the EU.
(Lead image source: Shutterstock)