China's major stock indices opened lower on Monday, with the Shanghai Composite Index dropping 0.65% to 3,926.53 points, the Shenzhen Component Index shedding 1.35% to 13,764.41 points, and the ChiNext Index falling 1.67% to 3,367.04 points. The STAR 50 Index declined 2.34% to 1,623.20 points.
By 9:33 a.m., 1,168 stocks across both exchanges were trading higher, while 4,137 were in negative territory and 246 remained flat. Leading gainers included real estate services, digital media, property development, decoration and renovation, construction machinery, and large state-owned banks. On the downside, nonferrous metals, pharmaceuticals and biotechnology, photovoltaic equipment, and jewelry led the losses.
All four major A-share indices opened lower on Monday, with the STAR 50 and ChiNext bearing the brunt of the sell-off, reflecting notable pressure on technology-oriented growth sectors. The overall market saw only about 21% of stocks trading higher, signaling weak profit-taking sentiment.
Bolstered by a new real estate credit management policy issued on August 28, property-related sectors such as real estate services and property development bucked the downtrend and led gains. Conversely, nonferrous metals declined the most, dragged down by Friday's sharp drop in international gold prices, with precious and industrial metals falling particularly hard. Pharmaceuticals, biotechnology, and photovoltaic equipment followed the broader weakness.
Federal Reserve policy signals pressured gold prices and US equities on Friday. Fed Chair Warsh, delivering his first major speech since taking office at the Jackson Hole global central bank symposium on August 28 (US Eastern Time), stated that inflation remains "too high" and that there is "more work to do" unless he is convinced underlying price pressures are easing quickly enough. Market pricing for a September rate hike rose to 57%. Spot gold tumbled 2.95% to $4,453.67 per ounce, snapping a three-week winning streak. US stocks closed lower, with the Dow Jones Industrial Average dipping 0.02% to 53,559.99, the S&P 500 falling 0.25% to 7,711.76, and the Nasdaq Composite losing 0.52% to 26,402.42.
Oil prices jumped after Iran said the Strait of Hormuz is effectively closed. Following a US strike on an Iranian rocket launch facility on Larak Island on August 30, Brent crude futures rose 1.88% to $89.76 per barrel in early Asian trading on August 31, briefly surpassing $90. Meanwhile, Iran's Deputy Foreign Minister Gharibabadi stated on August 29 that the strait is completely closed and all vessels must obtain Iranian coordination and permission to pass, calling US claims that ships had transited the waterway "entirely false."
China's new real estate credit policy extends mortgage terms to 40 years. The People's Bank of China and the National Financial Regulatory Administration jointly issued the "Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Real Estate Development Model" on August 28. The maximum term for individual housing loans has been extended from 30 years to 40 years, and existing floating-rate mortgages can now be renegotiated or replaced. On the same day, the Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission issued Announcement No. 26 of 2026, which standardizes individual income tax policy on transferring restricted shares of listed companies, applying a 20% tax rate on "property transfer income." The policy also brings bonus shares generated after the lifting of restricted share lockups into the taxable base and eliminates the previous rule of calculating the cost basis at 15% of transfer proceeds, with a grandfathering provision for existing holdings.
ChangXin Memory announced on August 29 that its LPDDR6 memory chips have officially entered mass production, with peak data rates of 12,800 Mbps and maximum capacity of 16GB. The National Data Administration will establish a new round of pilot zones for data annotation across 32 cities. Half-year earnings season concluded with divergent results: China National Petroleum Corp posted a record first-half net profit of 103.936 billion yuan, up 22% year-over-year; China State Shipbuilding recorded net profit of 9.954 billion yuan, a 163.51% surge; Mobius Semiconductor turned profitable with 612 million yuan in net profit driven by higher GPU shipments; and LONGi Green Energy reported revenue of 27.045 billion yuan, down 17.58% year-over-year, with a net loss of 3.684 billion yuan.
Market outlook: Monday's broad decline, led by the STAR 50 (-2.34%) and ChiNext (-1.67%), comes as investors digest Friday's hawkish comments from Fed Chair Warsh, which sent gold down 2.95% and pressured high-valuation sectors such as nonferrous metals and healthcare. In contrast, the real estate credit policy released on August 28 triggered strength in property-linked stocks, providing one of the few bright spots on the day. Institutional consensus leans toward a market driven by external headwinds alongside domestic policy support, with near-term trading likely to remain range-bound and consolidative. Positioning strategies may continue to favor a "rebalancing" approach, focusing on hard-tech core assets aligned with earnings momentum and industry trends, alongside undervalued sectors poised for catch-up gains.
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