Chinese blue-chip stocks remained close to one-year lows as the latest round of credit, mortgage, and investment stimulus from Beijing struggled to restore investor confidence. With trading subdued ahead of the upcoming National Day holiday, major benchmarks are heading toward their sharpest quarterly declines in over four years.
Key Takeaways from the Market Update
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Steep Quarterly Declines: The CSI 300 index hovered near its one-year low, tracking a roughly 13% quarterly drop—its worst performance since the 2022 COVID-19 lockdowns. Meanwhile, the Shanghai Composite headed toward a 6.2% quarterly decline.
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Stimulus Measures Fall Short: Beijing introduced broad credit support, including a 25-basis-point cut to the one-year pledged supplementary lending rate (down to 1.5%), alongside targeted mortgage subsidies and relending quotas for tech firms. However, market participants viewed the package as insufficient to meaningfully shift sentiment without direct equity market support.
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Property and Tech Sectors Under Pressure: The CSI 300 Real Estate Index experienced heavy volatility, highlighting ongoing structural drags from the housing sector. Concurrently, high-flying tech shares retreated, with the CSI Semiconductor Index and CSI AI Index facing sharp quarterly losses of roughly 32% and 25%, respectively.
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Low Holiday Turnover: Combined turnover on the Shanghai and Shenzhen stock exchanges dropped to 1.41 trillion yuan—its lowest level since July 2025—reflecting a cautious investor stance ahead of China’s week-long National Day holiday.
