The market opened with a morning rally but reversed course sharply, with both the ChiNext and STAR 50 indices falling over 1% by the close.
On August 28, the broader market experienced a midday peak followed by a sustained decline, with the Shanghai Composite Index slipping 0.11%, the Shenzhen Component Index down 0.68%, and the ChiNext Index dropping 1.41%. While 3,013 stocks advanced and 82 hit their daily limit, 2,390 declined. Agricultural stocks surged against the trend, with companies like Dunhuang Seed, Xinsai Co., and Wanxiang Denong all hitting limit-up. Meanwhile, the chemical sector rallied collectively with金牛化工, Chitianhua, and Lutianhua also reaching limit-up. On the downside, innovative drug and CRO concepts tumbled, with Wanbang Pharma and CanSino Biologics both falling over 10%.
So why did today's trading turn so cautious? The market appears to be waiting for a key catalyst to land, with traders refraining from major bets ahead of the Federal Reserve Chair's speech at Jackson Hole, hoping for clues on the future path of interest rates. This caution weighed across Asia, where the Nikkei 225 closed slightly lower and South Korea's KOSPI dropped nearly 2%.
Adding to the pressure, initial enthusiasm over artificial intelligence trades began to fade after Nvidia's optimistic outlook. Marvell Technology further dampened tech sentiment, with its stock falling over 7% after hours following its earnings report. Although Marvell posted second-quarter revenue of $2.74 billion, up 37% year-over-year, and adjusted EPS of $0.94, both slightly beating estimates, and its data center segment grew 46% to $2.2 billion as a key growth driver, with third-quarter revenue guidance of $3.15 billion far exceeding expectations, the stock still plummeted after hours. The reason: the shares were already up 184% this year, leaving little room for market expectations to be exceeded.
Investors are now bracing for the Fed Chair's remarks at the central bank's annual symposium in Jackson Hole, Wyoming, with some anticipating a potentially hawkish tone. The Federal Reserve held the federal funds rate steady at 3.5% to 3.75% at its latest meeting, and futures markets are already pricing in a 25-basis-point rate increase before year-end. Analysts suggest the positive momentum from Nvidia's earnings likely faded quickly during the session, as traders repositioned ahead of the potential impact of the Fed Chair's speech.
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