After a sharp shock on October 8, the opening of A-shares on October 9 ushered in an adjustment, and it was normal to return after a rapid rise, and institutions are still optimistic about the market in the fourth quarter.
A shares opened slightly lower //
With the short-term surge, on October 9, A-shares opened slightly lower, with the Shanghai Composite opening 1.79% lower, and then lower, once falling more than 4%. The Shenzhen Component Index and the ChiNext Index opened 2.92% and 4.84% lower, respectively, with a slightly larger margin, and then both moved lower.
Wind data shows that under the sharp fluctuations in the market, the financing balance reached 1,538.136 billion on October 8, a sharp increase of more than 100 billion from the previous trading day.
Hong Kong stocks have taken the lead in falling yesterday //
On October 8, Hong Kong stocks took the lead in cooling down. Wind market shows that as of the close of trading on October 8, the Hang Seng Index fell 9.41%, the largest single-day decline since the end of October 2008, that is, in nearly 16 years. Hang Seng Technology fell 12.82%, the biggest one-day drop since the index was listed, setting a new record.
FTSE China A50 futures also dived high. On October 8, FTSE China A50 futures fell by more than 10%, and rebounded on October 9 after a sharp short-term decline.
Batch reduction announcement is coming //
After the sharp rise in A-shares, the announcement of the batch reduction of important shareholders of listed companies overnight came. Wind data shows that nearly 100 companies have disclosed the progress or plans to reduce their holdings on the evening of October 8. The number of shareholding reduction announcements has surged, taking advantage of the rise in stock prices, and the reduction of shareholder holdings in high-level companies has "accelerated".
JPMorgan Chase & Co. pointed out that the forward price-earnings ratio of China's stock market has rebounded significantly, indicating that policy is shifting in the direction of asset reflation released by the currency/real estate "combination punch", and also reflects the market's high expectations for fiscal stimulus, but it may be too optimistic in the short term. After the opening of A-shares on October 8, Hong Kong real estate stocks, consumer stocks and financial stocks may see a pullback, but this is healthy. As more individual investors enter A-shares, their performance may outperform Hong Kong stocks.
According to the analysis of Yang Chao of Galaxy Strategy, the current valuation of the A-share market is at a historically low level, and the value of medium and long-term investment is highlighted. In the short term, boosted by favorable policies, investor sentiment has improved, and the A-share market has rebounded rapidly. Policies to stimulate economic growth are expected to be implemented in the fourth quarter, and investors' risk appetite is expected to remain low in the fourth quarter, coinciding with the United States presidential election. In the long run, the rebound in A-shares depends on whether the economic fundamentals can trend better and whether investors' risk appetite improves.
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