The three major A-share indices of Shanghai and Shenzhen closed down by 1.4% to 3.1%. The trading volume in Shanghai and Shenzhen exceeded 3 trillion RMB again. Oil and shipping stocks rose against the trend, while chip-related stocks all turned down

The central parity rate of the RMB against the US dollar is reported at 6.9088, an increase of 148 points from the previous day, reaching a new high since May 4, 2023. The People's Bank of China today (3rd) conducted a seven-day reverse repurchase operation of 34.3 billion RMB in the open market, with the operation rate remaining at 1.4%. Today, 526 billion RMB of reverse repos are maturing, resulting in a net withdrawal of 491.7 billion RMB for the day.

The three major A-share indices opened high but fell back, with the decline widening in the afternoon. The trading volume in Shanghai and Shenzhen exceeded 3 trillion RMB again. The Shanghai Composite Index briefly rose to a ten-year high in the morning session but eventually turned down, closing down 59 points or 1.4% at 4,122 points, with a turnover of 1.43 trillion RMB. The Shenzhen Component Index closed down 443 points or 3.1% at 14,022 points, with a turnover of 1.7 trillion RMB. The ChiNext Index closed down 84 points or 2.6% at 3,209 points, with a turnover of 750.5 billion RMB.

Ahead of the Two Sessions, bank and insurance stocks rose, with Industrial and Commercial Bank of China (601398.SH) and China Construction Bank (601939.SH) rising 2.3% and 2.1%, respectively. Ping An Insurance (601318.SH) and China Life (601628.SH) rose 0.4% and 1.2%, respectively. In addition, CATL (300750.SZ) rose 1.1%. BYD (002594.SZ) fell 1.6%.

With the tense geopolitical situation in the Middle East, the three major oil companies continued to surge, with CNOOC (600938.SH), PetroChina (601857.SH), and Sinopec (600028.SH) all hitting the daily limit. PetroChina's stock price continued to reach an 11-year high, while CNOOC reached a historical high. Oil, gas, and shipping stocks continued to rise, with Shandong Molong (002490.SZ), ZPEC (603619.SH), China Merchants Energy (601975.SH), and COSCO Shipping Energy (600026.SH) all hitting the daily limit.

Gold-related stocks fluctuated downward, with Hunan Gold (002155.SZ), Shandong Gold (600547.SH), Chifeng Jilong Gold Mining (600988.SH), and Zhaojin Mining (000506.SZ) falling between 1.9% and 3.4%.

Chip stocks turned down in the afternoon, with SMIC (688981.SH) A-shares and Hua Hong Semiconductor (688347.SH) A-shares falling 3.8% and 7%, respectively. AI chip stock Cambricon (688256.SH) fell 4.9%. Domestic GPU stocks Muxi Co., Ltd. (688802.SH) and Moore Threads (688795.SH) fell 4.9% and 6.5%, respectively.

Military industry stocks significantly retreated, with Hangya Technology (688510.SH) and Aerospace Huanyu (688523.SH) falling 15.1% and 10%, respectively. Northern Long Dragon (301357.SZ) also fell by half