Leverage climbs with the rally
Outstanding margin financing on China's two main stock exchanges reached 2,614.262 billion yuan as of August 7, 2026, an increase of 6.992 billion yuan from the previous session, according to exchange data reported on August 10. The Shanghai Stock Exchange accounted for 1,344.618 billion yuan, up 4.341 billion yuan on the day, while the Shenzhen Stock Exchange stood at 1,269.644 billion yuan, up 2.651 billion yuan.
The build-up in leverage accompanied one of the strongest weeks for A-shares this year. Combined turnover across the Shanghai, Shenzhen and Beijing exchanges reached 12.15 trillion yuan in the week of August 3 to 7, averaging about 2.43 trillion yuan a day and slightly exceeding the prior week.
Market and leverage snapshot
| Indicator | Level | Change |
|---|---|---|
| Total margin financing balance (Aug 7) | 2,614.262 billion yuan | +6.992 billion yuan |
| Shanghai exchange balance | 1,344.618 billion yuan | +4.341 billion yuan |
| Shenzhen exchange balance | 1,269.644 billion yuan | +2.651 billion yuan |
| Weekly turnover (Aug 3-7) | 12.15 trillion yuan | daily average 2.43 trillion |
| Turnover on August 7 | 2.66 trillion yuan | +135.6 billion yuan |
Small caps and technology lead
The rally was broad but tilted decisively toward smaller and higher-beta names. Over the week the Shanghai Composite added 2.81% to close at 3,940.04 on Friday, reclaiming the 3,900 level after a sharp late-July correction. The ChiNext index gained 6.55% and the STAR 50 rose 6.61%, while the CSI 1000 and CSI 2000 small-cap benchmarks surged 8.54% and 9.83% respectively.
On August 7 alone the Shanghai Composite rose 1.02%, the Shenzhen Component Index gained 1.42% to 14,311.01 and the ChiNext index added 1.35% to 3,563.12. More than 2,800 stocks advanced. Innovative pharmaceuticals and contract research organisations led sector gains, with printed circuit board and specialty electronic gas names also active.
Why the leverage number matters
- Margin balances above 2.6 trillion yuan represent roughly a fifth of a typical week's total market turnover, a level at which forced deleveraging can amplify drawdowns.
- The daily increase of 6.992 billion yuan is modest relative to the balance, suggesting incremental rather than explosive leverage growth.
- Retail-heavy small-cap indices outperforming large caps by five to seven percentage points in a single week is historically associated with rising margin activity.
The macro backdrop
Equity strength is running ahead of the macro data. July consumer prices rose just 0.5% year on year with core inflation at 0.9%, the manufacturing purchasing managers index stayed in contraction at 49.2, and second-quarter GDP growth slowed to 4.3%. The People's Bank of China has reaffirmed a moderately loose policy stance for the second half and injected 500 billion yuan through outright reverse repurchase operations in early August.
Primary market activity is also heating up, with humanoid robot maker Unitree Robotics opening subscription for a 6.1 billion yuan STAR Market listing on August 10. For now, ample liquidity and a thin data calendar are supporting risk appetite, but the widening gap between index performance and earnings fundamentals leaves the market sensitive to any policy or credit disappointment.