A-shares opened higher but retreated, with the ChiNext Index dropping 0.52%. Banking stocks strengthened, with Bank of China hitting a fresh all-time high, while lithium mining stocks surged again. Property and Hainan Free Trade Port sectors led gains, whereas aquaculture, beauty care, food, and dairy sectors lagged.
On November 20, A-shares opened higher but pulled back in the morning session, with mixed performances across major indices. By midday, the Shanghai Composite rose 0.38%, the Shenzhen Component fell 0.05%, and the ChiNext Index dropped 0.52%. Banking stocks rallied collectively, with Industrial and Commercial Bank of China and Bank of China reaching new highs. Lithium mining stocks remained active, with Dawei Co. and Weiling Co. hitting the daily limit. Property stocks saw a late-morning surge, with World Union and 5i5j Group surging to the limit. On the downside, consumer stocks like food and beauty care declined, with Yike Food dropping over 10%. Overall, more than 3,000 stocks fell across Shanghai, Shenzhen, and Beijing markets, with half-day turnover hitting 1.12 trillion yuan. Key index performances:
- Shanghai Composite: 3,961.70 (+0.38%) - Shenzhen Component: 13,073.30 (-0.05%) - ChiNext Index: 3,060.93 (-0.52%) - CSI 300: 4,602.83 (+0.32%) - STAR 50: 1,337.37 (-0.55%) - CSI 500: 7,106.20 (-0.23%) - CSI 1000: 7,376.78 (-0.14%)
Market catalysts: CITIC Securities noted that Q3 industry net interest margins stabilized preliminarily, with undervaluation offering significant upside potential. Year-end allocations by long-term funds could catalyze the market. Guosen Securities highlighted listed insurers’ strong earnings growth in the first three quarters of 2025, driven by capital market recovery and liability-side improvements.
Sources indicate policymakers are considering new measures to revive the sluggish property market and prevent systemic risks.
**Hong Kong Market**: Mixed performance; Hang Seng Index up 0.14%, Hang Seng Tech Index down 1.01%. Auto and lithium battery stocks weakened, while property stocks rose. XPeng fell 4.55%, Trip.com dropped 3.57%; Baidu gained 2.34%, Kuaishou rose 1.81%.
**Commodities**: Mixed midday performance; Shanghai silver up 1.31%, international copper up 0.55%; coking coal down 2.74%, containerized freight index (Europe route) down 1.01%.
**Bonds**: Divergent trends; 30-year contract down 0.14%, 10-year up 0.04%, 5-year up 0.03%, 2-year flat.
**Property Stocks Surge**: - **HK**: Sunac (+9%), Country Garden (+5%), Vanke and Shimao Group (+3%). - **A-shares**: 5i5j Group limit-up, Teffy Service, World Union, Everbright Jiabao, Shenzhen Special Zone Real Estate, and Vanke A rallied.
Policy discussions reportedly include nationwide mortgage interest subsidies, higher tax deductions for homebuyers, and lower transaction taxes. Fitch warned of worsening bank asset quality in 2025 due to property market risks.
**Lithium Sector**: Spotlight on lithium carbonate futures breaching 100,000 yuan/ton, a high since June 2024, driven by energy storage and NEV demand. China Post Securities projects 2000GWh+ cumulative storage demand, with overseas growth at 40%-50% annually.
**Tech Stocks Drag**: Hang Seng Tech Index down over 1%; XPeng (-4%), Leapmotor (-2%), NIO (-2%).
**NIO’s Pressure**: CATL’s H-shares fell 6.68% as ~77.5 million locked-up IPO shares became tradable. JPMorgan flagged high short interest (95% utilization) and cut its target price to HK$575, expecting narrowed A-H premium post-lockup.
**Banking Strength**: Bank of China (+4%, market cap exceeding 2 trillion yuan), Postal Savings Bank, Everbright Bank, CCB, and CITIC Bank advanced.
**Bonds/Futures**: - Convertible bonds: Huamao Convertible (+4%), Outong Convertible (+3%). - Treasury futures: 30-year (-0.04%), 10-year flat, 5-year (+0.03%), 2-year (+0.01%).
**Openings**: - Shanghai Comp: 3,960.70 (+0.35%) - Shenzhen Comp: 13,215.07 (+1.03%) - ChiNext: 3,131.84 (+1.79%)
**Forex**: USD/CNY mid-rate at 7.0905 (-33 bps).
**Commodity Futures**: - Decliners: LU fuel, fuel oil, soda ash (-2%); container freight, pulp, coking coal (-1%). - Gainers: Lithium carbonate, polysilicon, Shanghai silver (+1%).
