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Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

Stimulated by a series of blockbuster policies, Chinese assets such as A-shares, Hong Kong stocks, and Chinese concept stocks have been strongly sought after by funds. After a continuous surge higher, the market opened high and went low on the first trading day after the holiday. Institutions believe that too fast growth will overdraft the upside, and the market will inevitably diverge.

On October 8, the trend of Chinese concept stocks cooled down. The Nasdaq China Golden Dragon Index fell 6.85%, the biggest drop since October 2022. JinkoSolar fell more than 20%, Daqo New Energy fell about 20%, EHang and Dada Group fell more than 16%, Tiger Brokers fell about 16%, Kingsoft Cloud, Gaotu Group, and Lufax Holdings fell more than 14%, and Bilibili and Weibo fell more than 12%.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

iShares MSCI China ETF fell 10.81%, after rising 4.68% the previous day; The Triple Long FTSE China Direxion ETF (symbol: YINN) fell 30.44% and rose 13.68% on the previous day.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?
Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

On October 8, the FTSE China A50 Index fell 10.83% and rebounded slightly in overnight trading.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

On October 8, the Hang Seng Index closed down 9.41%, and the Hang Seng Tech Index fell 12.82%; The market turnover was HK$620.4 billion, a record high. Real estate, technology, finance and consumer stocks fell, Longfor Group fell more than 22% to lead the blue chips, Hua Hong Semiconductor fell more than 23%, Chinese Life fell nearly 21%, and Mengniu Dairy fell more than 19%.

Judging from the K-line charts of the Hang Seng Index and the Hang Seng Technology Index, after this dip, the gains during the National Day holiday have all been given back.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?
Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

Everbright Securities International strategists said that Hong Kong stocks fell sharply intraday, and the market paid more attention to the performance of A-shares after the holiday. If we look at the cumulative gains of Hong Kong stocks in the past few weeks, the decline of the Hang Seng Index is relatively reasonable. Today's trading volume of Hong Kong stocks is relatively large, reflecting that under the resumption of A-shares, investors' gaming activities also tend to be active. It is expected that the short-term performance of Hong Kong stocks will still depend on the trend of A-shares, and in the medium and long term, it is expected that investors will continue to look forward to favorable policies, and the future stock index will still have some room for performance.

Yan Zhaojun, an international strategy analyst at China Thailand, said that because the violent rally of the extremely high slope of Hong Kong stocks is difficult to last for too long, the short-term valuation repair has been very sufficient, when the market ushers in the verification of economic data and policy landing, the volatility of the broader market may increase sharply, and it is not ruled out that there is pressure on high profit-taking, pay attention to the rhythm of trading, and take advantage of the high profit at the right time.

On the first trading day after the National Day holiday, A-shares got off to a good start, but the major stock indexes opened higher and moved lower intraday, and the gains were not synchronized. The Shanghai and Shenzhen indices closed up 4.59% and 9.17% respectively, and the ChiNext index rose the most, at 17.25%. The trading volume of A-shares exceeded 3.4 trillion yuan throughout the day, hitting a record high.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

Since September 24, the A-share market has been actively traded, and the flow of funds has changed significantly. Wind data shows that as of October 8, the cumulative net inflow of capital goods industry since September 24 was 56.839 billion yuan, and the technology hardware and equipment, materials, biopharmaceutical, food and beverage and tobacco, banking, automobile and auto parts industries all received net inflows of more than 10 billion yuan.

It is worth noting that on October 8, the diversified financial industry was sold off sharply, with a net outflow of 56.871 billion yuan, and a cumulative net outflow of 39.41 billion yuan since September 24. The materials, semiconductors and production equipment, software and services, real estate, and utilities industries all had net outflows of more than 10 billion yuan.

Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

Prior to this, there has been a significant increase in the announcement of shareholder reduction of listed companies. From September 23 to September 30, 87 A-share companies disclosed the results of recent shareholder reductions or future shareholding reduction plans, which was double the number of the previous week (September 15-September 22). According to statistics, from September 24 to October 7, more than 100 companies have disclosed the progress or plans to reduce their holdings. In addition to the surge in the number of shareholding reduction plans, the pace of the company's shareholders seems to be "accelerating", with some of the company's shareholders reducing their holdings of nearly one billion yuan in a single time, and some of the company's senior executives and shareholders "forming a group" to reduce their holdings and liquidate their shares.

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Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?

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Chinese concept stocks and Hong Kong stocks have fallen sharply, peaking or adjusting?