On November 21, the market experienced a full-day volatile adjustment, with the Shanghai Composite Index dropping over 2% and the ChiNext Index plunging more than 4%. By the close, the Shanghai Composite fell 2.45%, the Shenzhen Component Index declined 3.41%, and the ChiNext Index tumbled 4.02%. Sectors such as shipbuilding and AI applications led gains, while batteries, silicon energy, and lithium mining were among the biggest losers. Nearly 5,100 stocks declined, with 99 hitting the daily limit-down. The combined turnover of Shanghai and Shenzhen markets reached 1.97 trillion yuan, up 257.5 billion from the previous session.
The adage "be greedy when others are fearful" was put to the test today as panic selling reached an extreme. Only 354 stocks rose, marking the second-lowest count this year after April 7 (106 stocks). Amid such conditions, would investors dare to "buy the dip"? Hundreds of billions in capital have already stepped in, absorbing so-called "bloody bargains."
Wind data showed two notable spikes in predicted trading volume: first, during the opening (9:30–9:38), where volume surged 5%–13% year-on-year as Chinese stocks followed overnight U.S. declines alongside broader Asian weakness. The initial sell-off appeared orderly, with the CSI All Shares Index dropping about 1.5%. However, persistent selling pressure and weak buying support drove indices lower, triggering panic as losses exceeded 3%.
The second surge occurred between 10:30–11:30, with volume up 17%–20%, coinciding with a double-bottom formation and a partial rebound. The CSI All Shares Index hit intraday lows at 10:52 and 11:15 before recovering slightly. Despite the rebound, afternoon trading saw renewed weakness, with major indices hitting fresh lows and limit-down stocks increasing—indicating unresolved short-term panic.
This week’s first four trading days had seen muted, range-bound activity near support levels, suggesting limited fear. Today’s breakdown, however, confirmed panic selling, with early dip-buyers stepping in—though no one can be certain if the bottom is in.
Key market concerns include: 1. **U.S. Tech Worries**: Traders cited AI profitability doubts, strong September jobs data dampening Fed rate-cut hopes, Bitcoin’s slump signaling risk-off sentiment, and pre-options-expiry volatility. However, positive shifts emerged, such as U.S. Treasury Secretary Yellen’s call for Fed rate cuts and stabilizing Japanese bond yields. 2. **Domestic Resilience**: Despite broad declines, stabilizing blue chips (e.g., banks, dividend stocks) and a "large-cap stability, small-cap correction" trend persisted. The CSI All Shares Index tested its 20-week moving average for the first time since late June, drawing attention from institutional investors.
Regulatory support remains a factor. At a recent investor conference, CSRC Vice Chairman Li Ming emphasized stabilizing mechanisms to prevent sharp market swings. Data shows "national team" funds (e.g., Central Huijin) increased holdings in Q3, favoring financials and strategic sectors like AI, semiconductors, and renewables. Analysts expect sustained inflows from long-term capital, bolstering market stability.
Cover image source: Visual China-VCG211276657648
