Amid the backdrop of the ongoing trade war between China and the United States, the Chinese stock market resumed trading today (5th) after the long Chinese New Year holiday. The Shanghai Composite Index opened higher by nearly 20 points to reach 3270.16, but quickly plummeted to a low of 3220.28 before closing at 3,229.49. Earlier reports from Chinese media had claimed that the Year of the Snake started off on a positive note, provoking anger among Chinese stock investors.
The Shanghai Composite Index closed at 3250.60 points on January 27, opening today with a gain of 19.56 points at 3270.16. It dropped to a low of 3,220.28 points in the afternoon before settling at 3,229.49, down by 21.11 (0.65%). Nearly 2000 individual stocks on the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange saw declines.
In addition to a 0.65% drop in the Shanghai Composite Index, the Shenzhen Component Index closed up by 0.08%, while the Growth Enterprise Market Index fell by 0.04%.
At the opening bell, the Chinese financial media outlet “First Finance” proclaimed “A-share market starts the Year of the Snake with a red carpet.” The report stated that on the first trading day of the Year of the Snake, the three major indexes collectively opened higher, with the Shanghai Composite Index up by 0.6%, the Shenzhen Component Index by 0.8%, and the Growth Enterprise Market Index by 0.93%. Stocks related to DeepSeek concepts showed gains, with computing power, gold, and chip concept stocks leading the way; on the other hand, AI hardware stocks continued to decline, and CPO and high-speed copper connection concept stocks collectively dropped.
However, the tide quickly turned as the market turned red to green within a few minutes, prompting stock investors to angrily criticize the notion of a red carpet start for the Year of the Snake: “You all had a red carpet start? Then why is my screen all in red?”; “Color blind?”; “Red for 3 minutes and then turned green.”; “Self-deception.”; “Maybe it’s a parallel universe.”; “What’s going on, this red carpet is a joke.”; “Did I get color blindness during the New Year? It’s confusing.”; “Red carpet at the opening, and green at the closing.”; “Opened 19 points higher, just to be knocked down immediately. This is truly the fine tradition of A-shares.”
The new round of tariff war between the US and China began on Tuesday (February 4). After the new US tariffs on Chinese goods took effect on that day, the Chinese government immediately announced retaliatory tariffs on some American goods, which will come into effect on February 10. Additional investigations were also announced against Google by China, with two more companies added to the “Unreliable Entity List.” However, experts believe that Beijing’s retaliatory measures are largely symbolic with limited impact.