Finance and Economics Network Capital Market News After the central bank officially announced a comprehensive reduction of 0.5 percentage points last night, some media counted the rise and fall of the Shanghai Composite Index the next day after the announcement of nearly ten RRR cuts, of which 7 rose, and the overall probability of rising is greater. On December 7, the index diverged back after opening high, the Shanghai index was slightly stronger, fluctuating around the flat open line throughout the day, the Shenzhen component index and the ChiNext index remained at the bottom after falling green, and during the tail session, the three lines rose, and the Shanghai index successfully turned red.
As of the close, the Shanghai index rose 0.16% at 3595.09 points; the Shenzhen component index fell 0.38% to 14697.17 points; and the ChiNext index fell 1.09% to 3368.78 points. The two cities traded a total of 1,199.7 billion yuan, and northbound funds bought a net of 7.949 billion yuan.
Broader market movements
In terms of sectors, the real estate industry has strengthened across the board, and the decoration and building materials, real estate services, construction machinery, real estate development, cement building materials, and steel industries have collectively risen sharply. The consumption line as a whole is rising, and the aviation airport, food and beverage, tourism hotel, wine industry, agriculture, animal husbandry, feeding and fishing have risen. Big finance maintained a slight gain. In addition, the power industry, coal industry, film and television concept, pension concept, e-commerce concept and so on closed the red plate. Lithium batteries fell 2.69% to inhibit new energy lines, and military lines and semiconductor lines fell sharply. In addition, new energy vehicles, auto parts, electronic components, communication equipment and so on fell ahead.
Plate distribution
In terms of individual stocks, under the overall pressure of the index and the suppression of the main line of growth, the market has obviously fallen more and rose less, with a total of 2716 shares in the two cities closing down, 1715 shares closing up, of which 97 shares rose and stopped. The high number of ups and downs may mean that the structural hot market shows signs of intensification in the plate rotation.
Individual stocks are up and down
For the market trend, Guosen Securities pointed out that the rapid landing of the RRR cut has released a positive policy signal, dispelling the market's previous concerns about liquidity, and market confidence is expected to be boosted. In the medium and long term, the purpose of the RRR cut is to create a good monetary and financial environment for economic growth, and the financing cost of the real economy is expected to be reduced, especially small and micro enterprises are expected to benefit, which is conducive to economic stabilization and recovery. Overall, the RRR cut is a positive positive for the A-share market.
Today's market theme: the central bank cut the RRR to release dividends! The real estate line took the top spot
On December 7, real estate-related highs opened high, and the whole line trend was strong, of which decoration building materials rose by 2.18%, real estate services rose by 2.16%, construction machinery rose by 1.49%, real estate development rose by 1.22%, and cement building materials rose by 1.02%.
Decoration building materials led the rise in individual stocks
Real estate services led the gains
Real estate development led the gains
Cement building materials led the gains
On the news side, on the afternoon of December 6, Chinese Bank decided to reduce the reserve requirement ratio of financial institutions by 0.5 percentage points on December 15, 2021 (excluding financial institutions that have implemented a 5% reserve requirement ratio). After this reduction, the weighted average reserve requirement ratio of financial institutions is 8.4%. The RRR cut is a comprehensive RRR cut, the central bank said that in addition to some county-level legal person financial institutions that have implemented a 5% deposit reserve ratio, the deposit reserve ratio has been generally reduced by 0.5 percentage points for other financial institutions, and the RRR reduction has released a total of about 1.2 trillion yuan of long-term funds.
For the impact of the RRR cut on the property market, Yan Yuejin, research director of the think tank center of the Yiju Research Institute, said that "increasing the ability of financial institutions to allocate funds", popularly understood, is to increase the autonomy and delivery capacity of bank loans. In other words, banks have sufficient funds to put on the market, sufficient capacity to ensure that the real economy sector has sufficient support for credit, and sufficient capacity to maintain the active and stable development of the loan market.
Yan Yuejin believes that from the perspective of the real estate market, in fact, in the second half of this year, some banks are facing pressure, and the ability to allocate funds is obviously affected. Especially in the case of the previous tightening of housing loans, banks have no money to lend or the pace of loans has slowed down significantly. In the case of the current reduction of the RRR, the credit allocation ability of banks has been enhanced, and sufficient protection can be given for reasonable and compliant real estate loan demand, which can truly promote the active and more stable development of the real estate market.
In addition, the Politburo of the CPC Central Committee held a meeting on December 6. The meeting stressed that it is necessary to promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of home buyers, and promote the healthy development and virtuous cycle of the real estate industry. Among them, the reference to "virtuous circle" appears for the first time.
Huaan Securities believes that the reduction of the RRR has played a role in strengthening the new year's market, and the RRR reduction basically confirms that the liquidity level can give strong support before the first quarter of next year, in addition, the growth in December will show a weak stabilization pattern, so it will play a significant catalytic effect on the financial real estate market in the short term.
It is worth mentioning that on the evening of December 6, the Economic Reference Daily published a commentary article "Better support for the real economy and small and micro enterprises with a comprehensive reduction in the RRR". The article said that financial institutions should be guided to actively use the RRR reduction funds to increase support for the real economy, especially small and medium-sized enterprises. At present, the Medium-term Lending Facility (MLF) has become the main channel for financial institutions to obtain funds, but this approach is more beneficial to large financial institutions. By reducing the RRR, we can also increase the long-term stable funds of small and medium-sized financial institutions, so that they have greater motivation to support small and medium-sized enterprises.
In addition, according to First Finance, some insiders said that the reduction is mainly to strengthen the support for the real economy, especially small and medium-sized enterprises, rather than real estate. However, indirectly, the improvement of the real estate industry environment is expected to be further clarified, and the interest rate of the first home mortgage in some hot areas is still expected to be lowered, and the bank lending cycle is further shortened; on the other hand, the reasonable issuance of development loans and M&A loans for housing enterprises will also help individual housing enterprises with greater short-term liquidity pressure to bail out.
Market changes: the overall consumption line rose, and the brewing industry fell slightly after rushing higher
On December 7, the consumption line remained strong after opening high, and many sectors closed up, including food and beverages up 1.45%, tourist hotels up 1.29%, brewing industry up 1.02%, exclusive drugs up 0.83%, and e-commerce concepts up 0.55%.
Food and beverage led the gains
It is worth mentioning that many sectors of the consumption line, such as food and beverage, tourist hotels, and community group buying, have strengthened at the end of the plate and closed at a high level. The brewing industry fell back to adjust after rushing higher in early trading, and narrowed its gains in the afternoon.
Community group buying end-of-day strengthening
Food and beverage tail plate strengthened
The tail plate of wine is relatively weak
On the news side, the Political Bureau of the CPC Central Committee said at the meeting on December 6 that it is necessary to implement the strategy of expanding domestic demand, promote the sustained recovery of consumption, actively expand effective investment, and enhance the endogenous driving force for development. Micro policies should stimulate the vitality of market players.
In this regard, Shanghai Shenyin Wanguo Securities Research Institute said that the more changed content is that "promoting the sustained recovery of consumption" has been placed in the first article of "expanding domestic demand", which is in the front position and the importance is improved. At present, the market generally believes that there is a lack of effective means to stimulate consumption, which may become a source of poor follow-up policy expectations, and management is expected to cash in on breakthrough and innovative policies.
"The sustained recovery of consumption and the expansion of effective investment in benign interaction and mutual promotion will help to achieve a higher quality domestic cycle." Wang Yun, a researcher at the China Macroeconomic Research Institute, said that the current and even next year domestic and foreign environments are still complex and changeable, the epidemic situation is still unclear, and it is necessary to cope with external challenges by expanding domestic demand.
The market fell: lithium batteries continued to "collapse", and new energy lines went down
On December 7, lithium batteries fell back rapidly after a slight high opening, the intraday decline once reached 3.6%, the plate maintained the bottom adjustment in the afternoon, the tail plate rose slightly, the decline narrowed to 2.69%, of which Dingsheng New Materials, Fengyuan shares fell to a halt, Xiongtao shares, Hanchuan Intelligence, Rongjie shares fell more than 9%.
Lithium batteries led the gains
Under the sharp decline in the lithium battery sector, the overall trend of new energy lines is under pressure, of which energy storage fell by 2.2%, hydrogen energy fell by 1.55%, solar energy fell by 0.71%, and wind energy fell by 0.11%.
Lithium battery trend
Hydrogen energy trends
Solar trends
Wind energy trends
On the news side, CITIC Securities said that the extremely differentiated market in 2021 has overdrawn the growth space of some high-boom tracks for a long time in the future, while other sectors are at the low level of expectations and prosperity, and have experienced continuous valuation downward revisions. Abundant liquidity superimposed on extremely differentiated market characteristics, this year's high-boom varieties are easy to quickly overdraft the valuation space for a long time in the future, and damaged varieties are easy to reflect various negative expectations in advance, and any positive marginal changes in the future may be more sensitive.
Some market views believe that the continuous decline in lithium batteries is related to the reduction of overseas funds after the new high price of the Ningde era. In October, allianz Shenzhou A-share fund reduced its holdings in the top ten heavy stocks, of which the reduction in Ningde Era reached 18.58%.
As for the reasons for the reduction, the fund's letter materials wrote that the fund's performance in October exceeded the benchmark (MSCI China A-share onshore index). In terms of individual stocks, the largest contribution is only the stock of the world's leading lithium battery company. In October, the stock hit a new high. Battery demand is strong, and the stock and the electric vehicle industry as a whole benefit. By the end of the month, the company's performance was exceeding expectations.