Today, A-shares and Hong Kong stocks significantly diverged, with Hong Kong stocks surging and the Hang Seng Tech Index rising by over 2%, while A-shares plummeted, with the ChiNext Index falling by more than 2%, and the Shanghai Composite Index once again approaching the 3000-point mark. The surge in Hong Kong stocks was due to two major favorable factors, whereas the sharp decline in A-shares was the result of a structural market reaching its extreme. Recently, resource stocks such as non-ferrous metals have continued to soar, siphoning funds from the entire market, while technology stocks have continued to decline, creating an extreme split in the market. Extreme division implies instability, and every time the structural market in A-shares reaches its end, it concludes with a crash, which is the consequence of profit-seeking capital clustering.
Additionally, the ecosystem of A-shares is extremely poor, with various short essays and speculations emerging endlessly, and funds are highly speculative. Everyone is making short-term trades based on hot topics, which will inevitably exacerbate market volatility. Since short essays have taken the lead, many stocks are speculated upon before the announcement of favorable news, and when the favorable news is officially announced, it becomes the time to cash out. For example, yesterday Demingli announced its first-quarter earnings forecast, which greatly exceeded expectations, but today it was directly hit by a limit down, as many funds had already known in advance and speculated early.
Advertisement
Good performance leads to a sell-off, and poor performance leads to a pre-emptive sell-off, making the entire market extremely chaotic and causing panic among investors. The significant rise in coal and non-ferrous metals also reflects the increasing risk-aversion sentiment in the market.
Looking at today's major news:
Fitch Downgrades China's Sovereign Credit Rating Outlook
According to a report by Caixin, Fitch Ratings maintained China's sovereign credit rating unchanged but adjusted the rating outlook from "stable" to "negative." The Ministry of Finance has responded to this.
In addition to Fitch's downgrade of the sovereign credit rating outlook, the default by Ping An Trust and the social financing and CPI data to be announced this week, which may not meet expectations, are all somewhat bearish news.
As for the significant rise in Hong Kong stocks today, according to analyst views, the repurchase by internet companies such as Alibaba and Tencent, the surge in new energy vehicle sales, and policy support for the gaming industry have boosted foreign capital's confidence in Chinese enterprises in Hong Kong stocks. Additionally, some media reports suggest that Hong Kong may introduce a series of tax policies.
Vanke Sudden IncidentVanke, already at the center of attention, has suddenly faced negative news. According to a report by Caixin, the general manager of Vanke Jinan, Xiao Jin, was taken away for investigation by Shandong police 48 hours ago. The reasons for the investigation, as learned by the reporter, are varied and the specific cause has not yet been determined. Affected by this news, Vanke's stock price dived at midday, causing a collapse in the real estate sector.
Vanke stated that the company's recent performance announcements, which were below expectations, the cancellation of the annual dividend, and public opinion troubles have affected market performance. However, the company has a plan for debt repayment, and the management has also indicated that there will be corresponding measures for each debt to be repaid. They will actively collect sales payments, continue to focus on bulk transactions and equity transactions, maintain a good relationship with financial institutions in financing, and raise funds through project mortgage financing or operational property loans. Staff also mentioned that Shenzhen State-owned Assets and the major shareholder, Shenzhen Metro Group, have provided some support to the company in various aspects, some of which have been implemented, and some are still under discussion.
Sichuan: Implementing Fiscal Interest Subsidies for Consumer Credit
The General Office of the People's Government of Sichuan Province recently issued a document titled "Several Policy Measures to Continuously Consolidate and Strengthen the Upward Trend of Economic Recovery." It proposes the implementation of fiscal interest subsidies for consumer credit. From April 1, 2024, to September 30, 2024, for bank institutions that issue one-year or longer term loans to residents within the province for the purchase of automobiles, electronic products, home renovation, and durable consumer goods such as home appliances and furniture, the fiscal department will provide a one-time interest subsidy of 1.5% per annum, with a maximum of 3,000 yuan per loan, for a one-year term. Residents can enjoy up to two loan interest subsidies within the province. The required funds will be borne by the province and city/county in a ratio of 8:2.
Finally, a brief look at the market shows that by the close, the Shanghai Composite Index fell by 0.70%, and the ChiNext Index fell by 2.06%. The Hang Seng Index in Hong Kong rose by 1.85%, the Hang Seng Technology Index rose by 2.12%, and the Hang Seng China Enterprises Index rebounded from the bottom by more than 20%, entering a technical bull market. The turnover of the two markets shrank to 0.83 trillion, and the net outflow of Northbound capital was 4.114 billion, with more than 4,300 companies falling.
Looking at the industry, coal, public utilities, non-ferrous metals, petroleum and petrochemicals, and banking industries led the gains, while real estate, media, electronics, computers, and communications industries led the declines.
Tonight, the U.S. stock market will announce the March CPI data. Since the employment data released before the holiday greatly exceeded expectations, it has dampened the Federal Reserve's interest rate cut expectations, so tonight's CPI data is crucial, and the reduction in volume this week also contains a risk-avoidance sentiment.