The new trading rules for A-share mainboard ST stocks took effect on July 6, marking the end of the long-standing 5% daily price limit and ushering in a new era with a 10% limit.
As the first trading day under the revised regulations, market sentiment was highly polarized.
By the market close, a total of 10 ST stocks had hit the new 10% daily limit, with both gains and losses reaching the ceiling, highlighting a stark divergence in performance. The doubling of the intraday price movement range for these stocks has proportionally amplified both the potential risks and rewards associated with speculative trading in underperforming companies.
Initial Market Reaction
The Shanghai, Shenzhen, and Beijing Stock Exchanges jointly released the updated Trading Rules on April 24. The revisions aim to enhance the adaptability of the securities trading system and improve market stability, pricing efficiency, and liquidity. A series of new A-share trading rules within these regulations officially commenced on July 6, 2026, introducing changes to areas such as after-hours trading, fund closing mechanisms, ST stock trading, ChiNext market makers, and block trade confirmations. Among these, the relaxation of the price limit for ST stocks has drawn significant industry attention.
On this inaugural day of the new ST rules, July 6, trading activity for these stocks was exceptionally lively, with the performance gap widening considerably.
At the close, six stocks, including ST Xingnong, ST Haiwang, *ST Ruimao, *ST Dongzhi, ST Zhouji, and ST Longda, were locked at the 10% gain limit. Conversely, four stocks—*ST Gaoke, *ST Zhunyou, *ST Lianxiang, and *ST Meizhi—were locked at the 10% loss limit. Beyond these ten stocks that hit the new ceiling, an additional 34 ST stocks exceeded the previous 5% daily price fluctuation limit.
Implications of Increased Volatility
Notably, the 44 ST stocks that surpassed the old limits now experience significantly greater intraday price movement. While the potential for upside gains has expanded, the associated risks have increased correspondingly. A securities analyst commented on the changes, stating, "The new ST rules are designed to standardize market regulations and improve the pricing efficiency and liquidity of risk-warning stocks. However, these stocks inherently carry higher investment risks. With the widened daily price limit, the potential single-day volatility of their share prices has increased substantially. Should a stock face selling pressure, investor losses could multiply. For retail investors, it is crucial to remember that risk-warning stocks already pose a significant delisting risk. The relaxation of price limits does not enhance their investment value; a cautious approach remains the prudent strategy."
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