On the night of October 1, the financial markets were in turmoil. The European and American stock markets have collectively dived, while Chinese assets have risen against the trend, a phenomenon that has attracted widespread attention from all parties in the market.
Let's look at the U.S. stock market first, the whole market is not performing well. The Dow Jones closed down 0.41%; The S&P 500 fared even worse, falling 0.93%; The Nasdaq Composite Index fell sharply, reaching 1.53%, and at one point fell more than 2% during the session.
In terms of stock types, big tech stocks are mostly lower. Tech giants like Apple fell 2.91% and Microsoft also fell 2.23%.
Chip stocks generally fell, GF fell more than 4%, Nvidia, Microchip Technology, Intel, Micron Technology and other well-known chip companies, the stock prices fell more than 3%, Broadcom, Chaowei Semiconductor, Qualcomm also fell more than 2%, and ASML was not spared, falling more than 1%.
Bank stocks were also generally in the red, with JPMorgan Chase and Wells Fargo down nearly 2%, and Goldman Sachs, Citigroup and Bank of United States down about 1%. However, due to the escalation of the situation in the Middle East, most oil and gas stocks strengthened, and ConocoPhillips rose 3.88%.
Looking at the European stock market, it is also a situation where most of the dives are in the background. Several markets opened higher and then moved lower, with the Germany DAX index finally falling 0.58% to 19213.14 points; France's CAC 40 index fell 0.81% to 7574.07.
The digital currency market has suffered a sharp decline. Bitcoin fell to around $60,000 at one point, and Ethereum fell more than 5% during the day. Coinglass data shows that more than 150,000 people liquidated their positions in 24 hours, indicating that many investors have suffered significant losses in the digital currency market.
However, in stark contrast to the European and American markets are Chinese concept stocks. Chinese concept stocks bucked the trend and rose sharply, with the Nasdaq China Golden Dragon Index rising more than 5%.
Most of the popular Chinese concept stocks showed a trend of closing higher. Shell rose 17.43%, Bilibili rose 14.33%, Futu Holdings rose 12.43%, Li Auto rose 11.50%, Pinduoduo rose 8.03%, JD.com rose 7.33%, and Alibaba rose 6.24%.
Why is this happening? One important factor is the United States Wall Street giants' bullish appetite for Chinese assets.
BlackRock upgraded Chinese equities from neutral to overweight. The BlackRock Investment Institute gives their reasoning, arguing that Chinese equities are trading at a near-record discount to developed market equities.
What does this mean? In other words, the price of Chinese stocks is relatively low, and there is a great price advantage compared with stocks in developed markets. There are also some catalysts that could spur investors to re-enter the market, so they feel that there is still room for a modest increase in Chinese equities in the near term.
In addition, there are foreign media reports that global investors are preparing to return to China. For example, Gabriel Sacks, an emerging markets portfolio manager at United Kingdom asset manager Abrdn, said his group had "selectively" bought Chinese stocks last week.
Goldman Sachs' views in its latest research report are also worth watching. Goldman Sachs pointed out that Alibaba, Pinduoduo and JD.com have a combined market capitalization of only a quarter of Amazon's.
In China, the continuous release of favorable policies and the continuous high market enthusiasm have shown that there is huge room for the revaluation of the value of China's e-commerce. Goldman Sachs also saw e-commerce stocks as the most preferred sector for the mainland internet industry on par with gaming stocks, and raised price targets for Alibaba, Pinduoduo, JD.com, Tencent and Meituan.
From a macroeconomic point of view, China's economy itself is uniquely resilient and dynamic. China's huge consumer market is a huge attraction. Take e-commerce as an example, China has a huge population base, which means huge consumption potential.
With the continuous development of technology, the e-commerce model is also constantly innovating, whether it is new forms such as live streaming or community group buying, they are constantly exploring the depth and breadth of the consumer market.
Looking at China's technology companies, although they have faced some challenges in the past period, they are also constantly adjusting and developing. Taking Internet companies as an example, after undergoing regulatory adjustments, they have begun to pay more attention to compliance operations and actively explore new business growth points. For example, while Tencent is in the game business, it is also increasing investment in cloud computing, digital content and other fields; On the basis of e-commerce, Alibaba is also expanding its business territory in logistics and financial technology.
There may be many reasons for the plunge in European and American stock markets. From the perspective of United States, on the one hand, there may be macroeconomic policy uncertainty. United States's monetary policy has been adjusted, and the fluctuation of interest rates has a direct impact on the stock market.
For example, when interest rates rise, the cost of financing for companies will increase, which will affect the company's earnings expectations, which will lead to a decline in stock prices. On the other hand, United States some large enterprises are facing competitive pressure and bottlenecks in their own development. For example, some companies in technology stocks are facing intensified global competition, and if the speed of technological innovation cannot keep up, it is easy to be at a disadvantage in the market competition.
The plunge in European stock markets also has its own factors. Europe's economic recovery has been facing some challenges, such as energy supply issues. In the case of large fluctuations in energy prices, the production costs of many enterprises have increased, which will inevitably affect the profits and stock prices of enterprises.
As for the contrarian rise of Chinese assets, in addition to the aforementioned Wall Street giants and other factors, the stability of China's domestic policy environment is also an important factor. China has been committed to creating a good business environment and encouraging enterprises to innovate and develop. For foreign investors, a stable and predictable policy environment is very attractive.
From an investor's point of view, this market phenomenon also brings different implications to investors. For investors in the European and American markets, if they hold equity assets, they may need to pay more attention to changes in macroeconomic policies and the competitiveness of the companies themselves. And for investors with a focus on Chinese assets, this could be an opportunity. The contrarian rally in Chinese assets shows that the Chinese market has unique investment value.
However, investing always comes with risks. Although Chinese assets are currently showing a trend of rising against the trend, investors should not be blindly optimistic. When investing in Chinese concept stocks or other Chinese assets, it is still necessary to conduct in-depth research on the fundamentals of the company, industry development trends and other factors.
There is a lot of uncertainty about the future market trend. Whether the European and American stock markets will continue to fall depends on a combination of factors.
If monetary policy in the United States tightens further, or if Europe's economic recovery encounters greater obstacles, then equities may also face downward pressure. For Chinese assets, although there are many positive factors at present, the interaction of the global economy cannot be ignored. If there is a global recession, the export and other businesses of Chinese companies will also be affected to a certain extent.
However, in the long run, the development potential of China's economy is still huge. With China's continuous investment and development in scientific and technological research and development, green energy, high-end manufacturing and other fields, China Asset Management is expected to continue to show its unique investment charm.
China's technology companies have huge development opportunities in emerging fields such as artificial intelligence, 5G communications, and new energy vehicles, and the growth of these companies will also bring more returns to investors.
In today's financial globalization, various markets are becoming more and more interconnected. The plunge in European and US equities and the contrarian rally in Chinese assets are not isolated events, they reflect the changing global economic landscape and the interaction between different economies. Investors need to pay close attention to the global economic dynamics and grasp market opportunities, while also being cautious about various risks.