Source: China Securities Journal
On October 14, the A-share market fluctuated higher after opening high, with the Shanghai Composite Index, the Shenzhen Component Index, and the ChiNext Index all falling intraday, and then strengthening significantly, with the three major indexes all rising more than 2%. More than 5,000 stocks rose in the A-share market throughout the day, and more than 120 stocks rose to the limit, and sectors such as technology, military industry, and real estate chain were active. Wind data shows that the turnover of the A-share market on the day reached 1.65 trillion yuan, and the net outflow of main funds in Shanghai and Shenzhen was less than 5 billion yuan, a significant decrease from the previous trading day.
Analysts believe that from a historical point of view, after the rapid rise of the short-term market, it usually turns to a volatile upward movement, and it is expected that the market will gradually change from the capital sentiment driven to the fundamental verification driven, and the market characteristics will change from impulsive ups and downs to stabilize and rise slowly.
The market is generally rising
On October 14, the A-share market fluctuated and strengthened, with the Shanghai Composite Index, Shenzhen Component Index and ChiNext Index rising 2.07%, 2.65% and 2.60% respectively. The three major indexes all fell at one point during the session, but after the dip, the three major indexes began to strengthen across the board, and the market volume increased, and the three major indexes all rose more than 2% at the close.
On the 14th, the number of rising stocks in the A-share market was 5,023, the number of stocks with a daily limit exceeded 120, and the number of falling stocks was only 282. In terms of transactions, the turnover of A-shares on the day was 1.65 trillion yuan, an increase from the previous trading day, of which the turnover of the Shanghai Stock Exchange was 701.499 billion yuan and the turnover of the Shenzhen Stock Exchange was 933.486 billion yuan.
From the perspective of the disk, the industry sector rose across the board, and the technology, military, real estate chain and other sectors broke out. Shenwan's primary industries rose across the board, and the computer, national defense and military industries, and electronics industries rose first, up 5.52%, 4.70%, and 4.07% respectively.
The computer industry, which led the rise, staged a 20% daily limit for many stocks such as Ren Zixing, Yusys Technology, Runhe Software, Xiling Information, and Kelan Software, and many stocks such as Tuowei Information, Changshan Beiming, and Guoxin Health.
In the national defense and military industry, Zhongke Haixun, China Avionics Measurement, and Northern Changlong have a 20% daily limit, and the Great Wall Military Industry, Refining Aviation, and Lihang Technology have a daily limit.
Wind data shows that in the few trading days since October, the market has gradually shrunk, with the turnover of A-shares being 3.48 trillion yuan on October 8, 2.97 trillion yuan on October 9, 2.16 trillion yuan on October 10, and 1.59 trillion yuan on October 11. It is worth noting that on October 11, due to the Chung Yeung Festival holiday in Hong Kong, the trading of northbound funds was suspended, and on October 14, the trading volume of northbound funds resumed on October 14, so the trading volume of A-shares increased slightly compared with that on the 11th.
Positive signals continue to accumulate
Looking back at the recent A-share market, positive signals continue to emerge in the market. On September 24, the State Council New Office held a press conference, at which the responsible persons of the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission introduced the relevant situation of financial support for high-quality economic development and announced a series of policies. On September 26, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and plan the next step of economic work.
After that, the policy combination was intensively implemented. On September 27, the People's Bank of China (PBOC) announced that it would cut the reserve requirement ratio of financial institutions by 0.5 percentage points from September 27, 2024 (excluding financial institutions that have implemented a 5% reserve requirement ratio). On the same day, the central bank issued an announcement that in order to increase the counter-cyclical adjustment of monetary policy and support stable economic growth, from September 27, the interest rate of 7-day reverse repo operation in the open market will be adjusted from the previous 1.70% to 1.50%.
On September 29, the People's Bank of China (PBOC) issued an announcement to improve the pricing mechanism of commercial personal housing loan interest rates, allowing existing housing loans that meet certain conditions to re-agree on the increase range, and promoting the reduction of existing housing loan interest rates. At the same time, the self-discipline mechanism for market interest rate pricing issued a proposal that all commercial banks should, in principle, carry out batch adjustments to eligible existing housing loans before October 31, 2024.
On October 10, the central bank issued an announcement to create an initial swap facility of 500 billion yuan to support the development of the capital market.
On October 12, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and other banks successively issued announcements that they would adjust the interest rates of existing personal housing loans in batches from October 25.
On October 12, the State Council Information Office held a press conference, at which the relevant person in charge of the Ministry of Finance introduced the relevant situation of "increasing the counter-cyclical adjustment of fiscal policy and promoting high-quality economic development" and answered questions from reporters. At the meeting, the relevant person in charge of the Ministry of Finance said that a package of targeted incremental policy measures will be launched in the near future.
At the market level, Wind data shows that as of October 14, the rolling P/E ratio of Wind All A was 18.23 times, and the rolling P/E ratio of CSI 300 was 13.19 times, which is still cost-effective. Incremental funds also continued to flow into the market, with the financing balance of the A-share market increasing by 140.949 billion yuan last week, and the net inflow of equity ETF funds exceeding 150 billion yuan.
Zhang Qiyao, chief strategic analyst of Industrial Securities, said that under the intensive implementation of the continuous policy combination since September 24, risk appetite has ushered in a rapid recovery. Under the new policy guidance of "grasping the key points and taking the initiative", the continuous policy combination will bring about a virtuous cycle of the stock market environment and China's economy.
"Until the economic fundamentals improve significantly, it is expected that the policy increase will continue." Official Lei, deputy general manager and chief strategic investment of Xingshi Investment, believes that the macro environment facing the stock market has improved significantly.
Institutions are optimistic about the market outlook
Compared with last week's trading days, the market capital sentiment picked up on the 14th. Wind data shows that on the 14th, the net outflow of main funds in Shanghai and Shenzhen was 4.782 billion yuan, a net outflow for 6 consecutive trading days, but compared with before, the net outflow decreased significantly. Among them, 2,006 stocks had a net inflow of main funds, and 3,084 stocks had a net outflow of major funds. In terms of industry sectors, 12 industries saw a net inflow of main funds on the 14th, and the net inflow of main funds in the electronics, banking, and power equipment industries ranked first, with net inflows of 4.318 billion yuan, 2.434 billion yuan, and 1.177 billion yuan respectively. In terms of individual stocks, Lingyi Intelligent Manufacturing, iSoftStone, and Industrial and Commercial Bank of China received the top net inflows of major funds, reaching 788 million yuan, 661 million yuan, and 588 million yuan respectively.
For the A-share market, Fang Lei said that the medium-term return on investment tends to increase, the policy effect has been verified, and the economic fundamentals have improved, which will open the second stage of the market reversal.
"Historically, a short-term market upside has usually turned volatile after a rapid upside." Zhang Yusheng, chief analyst of Everbright Securities Strategy, said that under the positive statement of fiscal policy on October 12, the market index as a whole still has opportunities to rise, but investment opportunities may gradually shift from β to α, and the choice of investment structure will be more critical in the coming period. In terms of configuration direction, you can pay attention to the two directions of elastic target and pro-cyclical.
Qin Peijing, chief strategic analyst of CITIC Securities, said that the current market is in the transition stage from the expected reversal to the big inflection point of the market, the market in the early stage of the impulse rise, the long and short game intensified, the pace of entry of over-the-counter incremental funds slowed down, but the scale of potential funds into the market is still large, it is expected that the market will gradually change from the capital sentiment driven to the fundamental verification driven, and the market characteristics will shift from the impulse rise and fall to stabilize and rise slowly. (Source: China Securities Journal)