Hong Kong stocks, which have risen sharply for days, pulled back in depth yesterday (8th) and closed down 2,172.99 points, setting a record for single-day point declines, falling below the 21,000-point level in one day, and evaporating all the gains accumulated during the National Day holiday.
Under the return of Beishui, the full-day turnover reached 620.438 billion yuan, a record high, which is also the first time in history that the single-day main board turnover of Hong Kong stocks exceeded 600 billion yuan. The net inflow of North Water was about 2.1 billion yuan for the whole day.
Hong Kong stocks
Record-breaking volume plummeted
On the 8th, Hong Kong stocks fluctuated. The Hang Seng Index opened 250 points lower in the morning market and fell more than 1,000 points within 5 minutes of opening. The National Development and Reform Commission held a press conference at 10 o'clock, but there was no major stimulus policy and its details as expected by the market, and Hong Kong stocks once plunged 2,336 points and fell to 20,762 points.
Subsequently, although the decline narrowed for a time, after the end of A-share trading, the selling pressure of Hong Kong stocks increased again, and blue chips fell sharply across the board, and finally the Hang Seng Index closed down 2,172.99 points or 9.41% to close at 20,926 points, breaking the largest single-day drop of 2,061 points set on January 22, 2008. The technology index fell 12.8% to close at 4,695 points, falling below the 5,000-point mark, and all the constituent stocks fell; The HSCEI fell 10.2% to close at 7,483 points, and all its constituents fell.
Disk: Stocks in key sectors all fell
On the market, new economy stocks fell heavily and dragged down the market. Among them, Tencent (700), Alibaba (9988), Xiaomi (1810) all fell more than 8%, JD.com (9618) fell nearly 12%, and Meituan (3690) fell 15%.
Domestic real estate stocks continued to give up, with Longfor (960) falling 22.6%, the worst performing blue chip; Sunac (1918) fell 37.1%. Among them, the real estate stocks in the penny price fell even more, with Ronshine China (3301) down 43.3% and Agile (3383) down 41.7%.
Recently, the very strong Chinese brokerage stocks are also the hardest hit by the market. CITIC Securities (6030) fell 23.5%, CICC (3908) fell 34.0%, China Merchants Securities (6099) fell 36.4%, and Everbright Securities (6178) fell 29.3%.
Domestic insurance stocks were also under pressure: China Life (2628) fell 20.9%, Ping An of China (2318) fell 15.8%, New China Insurance (1336) fell 25.2%, Zhongan Online (6060) fell 24%, China Reinsurance (1508) fell 21.7%, and PICC (1339) fell 16.7%.
Recently, semiconductor chip stocks have fallen sharply. SMIC (981), which has risen sharply for several days, fell 18%, and Hua Hong Semiconductor (1347) fell 23%.
Heavyweight financial stocks also fell significantly. The Hong Kong Stock Exchange (388) fell 13%, Pingbao (2318) and China Life (2628) also fell 15.83% and 20.88% respectively, China Merchants Bank (3968) fell 16%, and China Construction Bank (939) and Bank of China (3988) fell 5.83% and 5.39% respectively.
Institutions: Market volatility is expected to intensify in the future
In response to the sharp adjustment of the Hong Kong stock market, a number of institutions have published analysis reports on the 8th.
Morgan Stanley China equity strategist Wang Ying released a report saying that the fiscal stimulus announced by China's National Development and Reform Commission was less than market expectations. As it is difficult to have more revaluation opportunities at the index level, it is expected that the market will fluctuate in the short term and the performance of individual stocks will be differentiated.
Goldman Sachs also pointed out that the National Development and Reform Commission only reiterated the commitment of the Political Bureau of the Central Committee to "accelerate the implementation of a package of incremental policies" on the 8th, focusing more on residents' lives and consumption, but based on the high expectations of the capital market for stimulus measures before the press conference, this lack of details of the press conference disappointed investors. The bank also said that it will pay close attention to the upcoming extraordinary meeting and the next meeting of the Standing Committee of the National People's Congress.
China Thailand said that the short-term valuation repair of Hong Kong stocks has been very sufficient, and when the market ushers in the verification of economic data and policy landing, the volatility of the broader market may increase sharply. For the brokerage stocks that have been sought after recently, Huatai Securities said that the position of the brokerage sector is at a relatively low level, the policy support is strong, and the active trading brings a positive feedback loop, and it is recommended that investors grasp the investment opportunities under the return of market confidence.
Wu Lixian, a strategist at Everbright Securities International Securities, said that Hong Kong stocks fell sharply yesterday, but judging from the cumulative gains of Hong Kong stocks in the past few weeks, the decline in the Hang Seng Index is relatively reasonable. During the A-share market closure during this year's National Day holiday, Hong Kong stocks and Chinese concept stocks performed well. The Hang Seng Index has risen by more than 9%, and the Hang Seng Tech Index has risen by more than 13%. In the previous week, the Nasdaq China Golden Dragon Index rose more than 11%, significantly outperforming the three major United States stock indexes in the same period.
Da Mo raised the Hang Seng Index target
The most optimistic is 26,300 points
Morgan Stanley's chief Asian equity strategist Jonathan Garner's team raised their price targets for the Hang Seng Index, MSCI China Index and HSCEI Index in June next year in the latest Asia/Emerging Markets Investment Strategy Report. Among them, the target price of the Hang Seng Index rose by 26.8% to 21,550 points, and 26,300 points can be seen in the most optimistic scenario.
Pay attention to the sales of interior houses
According to the report, policy easing in the mainland is important, but valuations have been significantly revalued. The MSCI China Index is trading within 11.3x forward P/E or 10% of its post-2021 peak due to the recent surge in equities.
As for mainland policies, Da Mo believes that the relaxation of mainland real estate measures may boost short-term transaction volumes, but given the inventory of 43 million units and the potential supply of 8 million units, compared with the sales of 8 million units in the past 12 months, a more sustained recovery of the property market seems unlikely.
On the other hand, Da Mo pointed out that to continue to get rid of deflation, it is necessary to keep real interest rates at negative and adopt fiscal stimulus measures for consumers of about 5% of GDP within two years, that is, more than 10 trillion yuan. At the same time, it is also necessary to develop an overall debt restructuring plan for LGFV debt and reorient the financing direction of local governments.
At present, it is safer to defend than to attack
Da Mo also said that geopolitical risks, the United States election and policy uncertainty in 2025 are the top concerns between October and November this year.
"In today's highly complex environment, we believe it is safer to defend than to attack. We are increasingly concerned about oil prices and global growth risks in cyclical markets and industries. Da Mo mentioned that the United States Federal Reserve's interest rate cut and the outlook for earnings in emerging markets in Asia Pacific are more cautious than the market consensus.
The report recommends that investors should focus on beta or defensive options at market, sector and equity levels, including Australia, ASEAN, India and Latin America, with a sector bias towards consumer staples, healthcare, telecoms and gold miners.
3.45 trillion!
A-shares have skyrocketed again
The much-anticipated A-share market ushered in the first trading day after the National Day holiday on the 8th, and ushered in an epic high opening in a bullish wave - the Shanghai Composite Index opened 10.13% higher at 3674 points; The Shenzhen Component Index opened 12.67% higher at 11,864 points; The GEM index opened 18.44% higher at 2,576 points. (Related Reading ☞)
However, with the departure of profit funds and the exit of hedging funds, as well as the impact of the collapse of the Hong Kong stock market and FTSE China A50 index futures, A-shares also staged a "high diving" drama in early trading, but with the blessing of incremental funds, the three major indices quickly regained their strength. At the close, the Shanghai Composite Index rose 4.59% to 3489 points; The Shenzhen Component Index rose 9.17% to close at 11,495.10 points, while the ChiNext Index surged 17.25% to close at 2,550.28 points.
The trading volume exceeded one trillion in the opening 20 minutes
The popularity of A-shares is full, funds are flocking to enter the market, and the transaction volume is rising. Only 20 minutes after the opening of the market, the trading volume of the Shanghai and Shenzhen markets exceeded 1 trillion yuan (RMB, the same below), refreshing the record of the fastest trillion yuan set on September 30. 72 minutes after the opening of the market, the turnover exceeded 2 trillion yuan. As of the close, the full-day turnover of 34,500 yuan hit a record high, an increase of 858.9 billion yuan from the previous trading day.
In terms of sectors, brokerage stocks all rose sharply, with nearly 50 stocks such as CITIC Securities, China Galaxy, China Securities Construction Investment, CICC, and Everbright Securities. Chip stocks broke out collectively, and more than 60 shares such as SMIC, Jiangfeng Electronics, Fuman Micro, Aiwei Electronics, and Taiji Co., Ltd. rose to the limit.
Market risk is something to be feared
It is worth noting that during the Golden Week holiday, FTSE China A50 Index futures were speculated by global investors and continued to rise. Before the opening of A-shares on the 8th, the index reached a maximum of 16,359 points, more than 2,000 points higher than the 14,016 points on the last trading day before the holiday, up 16.7%. With the opening of A-shares, the index turned sharply and closed at 14,169 points at 4:30 p.m., a one-day plunge of more than 10%. In particular, Hong Kong stocks plummeted on the 8th, pouring cold water on confident investors.
After the long holiday, shareholders returned to a securities business department in Nanjing, Jiangsu Province to pay attention to the stock market. China News Service
Economist Song Qinghui pointed out in an interview with Hong Kong Commercial Daily that A-shares currently have a significant money-making effect, and in the recent initial part of the "bottom" characteristics, there is a high probability that the follow-up will continue to rise. However, the recent speculative speculation atmosphere is strong, and there are many risks, especially some stocks with large gains, the fundamentals are relatively poor, which is not enough to support higher stock prices, and the risks contained in them cannot be ignored. Investors should have a sense of awe of the market, should pay close attention to the fundamentals of listed companies, market sentiment, policy support effects, capital entry efforts, etc., and at the same time pay attention to risk control and rational investment, and must not blindly chase the rise and fall.
The bullish outlook is still the mainstream
As for the market outlook, whether it is foreign institutions or mainland investors, there are still many optimistic voices. Lin Yuan, a well-known investor, said, "This is an investment opportunity that has not been encountered in decades, and it is the biggest opportunity I have encountered since I engaged in stock trading. He believes that we are currently at the starting point of a big bull market, and A-shares will continue to rise in the next decade or even longer, and show a vigorous trend.
Yang Delong, chief economist of Qianhai Open Source Fund, told a reporter from Hong Kong Commercial Daily, "I had a live broadcast connection with Mr. Lin Yuan, and our views are very consistent. We believe that this round of market provides an opportunity for young people to turn around, and it is also a significant investment opportunity. Currently, many high-quality assets are still undervalued and far from the point of creating a bubble. At present, the market is still in the first stage of rising, which is characterized by a large influx of funds, and the trading volume continues to hit new highs, and even releases a sky-high volume. ”
Yang Delong said that on September 30, the transaction volume of the two cities exceeded 2.5 trillion yuan, and this time it will be released again. At this point, investors should hold high-quality assets and wait for valuations to recover. Subsequently, a rapid correction in the market may occur, which will provide investors with a second chance to rise. For investors who have not been able to enter the market in time before, they should seize the opportunity of the pullback after the first wave of the market to make a layout, and everyone should maintain confidence and patience in this round of bull market.
【Business Daily Review】
Hong Kong stocks are adjusted normally, and the confidence in the market outlook is not reduced
Hong Kong Commercial Daily commentator Li Mingsheng
Hong Kong stocks, which have been bullish all the way, adjusted in depth yesterday, falling sharply by 2,172 points or 9.4%, the largest point decline in history, and recorded a turnover of 620.4 billion yuan, which was also the most in history. Investors inevitably question: Is the bull market in Hong Kong stocks over? It cannot be ignored that the mainland stock market continued to be strong yesterday, coinciding with the resumption of trading during the National Day holiday, with Shanghai and Shenzhen A-shares surging by 4.6% and 9.2% respectively, with a total turnover of about 3.45 trillion yuan in the two markets, also setting a new historical record. On the one hand, Hong Kong stocks have accumulated huge gains recently, and all adjustments are normal. On the other hand, the continued strength of the mainland stock market will ultimately benefit Hong Kong. As the National Development and Reform Commission said at yesterday's press conference, it is full of confidence in the goals and tasks of economic and social development throughout the year, and full of confidence in maintaining sustained, stable and healthy economic and social development; For the big rise and small rebound of Hong Kong stocks, especially A-shares, which are still performing very well, investors should also be full of confidence in the market outlook.
In just six trading days, the Shanghai and Shenzhen stock exchanges have risen by 27% and 42% respectively, with record trading volumes, reflecting the high sentiment of investors. After all, there is no stock market in the world that only falls but does not rise, especially A-shares, which have been weak for a long time, and the good news that far exceeded expectations stimulated the accumulated rebound momentum is just the right time to release the accumulated rebound momentum. Among them, the soaring price of A-shares yesterday is not necessarily driven by the so-called post-National Day resumption of the market, after all, Hong Kong stocks fell sharply against the market on the same day, and even fell back to the level before the National Day; The reason why the market is further prosperous is more likely to be during the National Day, when the people heard and witnessed a good market, domestic demand and consumption were booming, and optimism was high, which was achieved on the basis of mutual infection and superposition. The two cities have set a new record for trading, and the turnover has increased by more than two percent compared with the previous trading day, which reflects the enthusiasm of shareholders entering the market.
Why did A-shares rise and Hong Kong stocks fall yesterday, and the two places are performing at opposite poles? The market environment in Hong Kong has always been different from that in the Mainland. For example, Goldman Sachs also published a research report entitled "Ten Reasons to Be Bullish on China's Stock Market", but the overseas market still does not have a deep understanding of the situation in the mainland, and even has misunderstandings due to the influence of smears, including the interpretation of the NDRC's press conference as "disappointing with new recruits", which may unnecessarily lead to investors' lack of confidence in the prospects of the mainland, and then lead to the performance of Hong Kong stocks with a higher degree of openness than A-shares.
Second, Hong Kong's investment market is relatively mature, with a complete range of two-way investment tools, and there is no market in the world that only rises and falls, so it is less likely to have an excessive unilateral market rise, and there will always be a technical adjustment in the short term overbought. In fact, the Hang Seng Index started from 17,000 points in the middle of last month, rising to a maximum of 23,000 points in less than a month, following last week's small adjustment of a single day fell by 1,000 points, yesterday's death came to a slightly deeper adjustment, which is expected, and now the 14-day RSI has fallen from the previous high of about 90 to the latest 60, to a certain extent is still slightly high, that is, it is not ruled out that it will continue to consolidate or adjust in the short term, but it is too early to say that the bull market is dead.
From Hong Kong stocks to A-shares, to maintain a rising market, in the final analysis, it depends on the economic prospects. In fact, the combination of measures promoted by the mainland will not be a matter of time or three moments if the policy effect is to be transmitted to the real economy; However, it is certain that the stock market, as a leading indicator, has successfully boosted market sentiment and domestic demand consumption atmosphere, and the lagging linkage of the real economy can complement each other, and the economic improvement will drive the stock market to be better and form a good cycle. The performance of A-shares continues to improve, and Hong Kong stocks are also expected to be linked, and the current spread of AH shares has risen to a high level, that is, H-shares have a lot of room to catch up. "Hong Kong is good, the country is good; If the country is good, Hong Kong is even better. "Under the premise that the mainland economy and stock market continue to boom, there is a great opportunity for Hong Kong's economy and stock market to be linked, so investors have no reason to lose confidence in the market outlook.
Source: Hong Kong Commercial Daily
Editor: Saichi
Cover: Zong Tsai
Proofreading: Jin Xia
Review: Jia Min
Executive Producer: Yushan