On October 20, the A-share market shook again, and the Shanghai Composite Index fell as much as 0.33% at one point, returning to below 3,000 points. However, how is this 3,000-point defense battle different from the past?
From the perspective of index composition, the current market is significantly different from the first 3,000-point battle in 2008. At the time, the market was dominated by large-cap blue-chip stocks. Today, with the expansion and structural adjustment of the market, the position of small and mid-cap stocks in the market is gradually increasing. This change increases the volatility and complexity of the market, making it more difficult to predict market movements.
It is worth noting that although the market continues to expand, the 3,000-point threshold has a richer connotation. In the first 3,000-point battle in 2008, all A-shares faced together. However, now, many of the more than 5,000 A-shares have long been operating independently in different spatial dimensions. For example, many consumer leaders even exceed "10,000 points". On the other hand, there are not a few stocks with a corresponding market point of "more than 2,000 points". This change makes it necessary for market participants to make more complex decisions when faced with a 3,000-point defense.
From the perspective of funds, the flow of northbound funds has always been concerned by the market. Although the recent net outflow of northbound funds has continued, at the same time, since August this year, more than 1,000 A-shares have been increased against the trend of northbound funds. In addition, there are also a lot of domestic funds actively deployed. With the rise of emerging sectors such as the Science and Technology Innovation Board and ChiNext Market, the ranks of institutional investors are also growing. This change enriches the investment ecology of the market, allowing investors to have more choices and strategies to use.
Investors' focus on fundamentals has also changed. In the past, investors paid more attention to the profitability of enterprises and the prospects of the industry. Nowadays, with the adjustment of economic structure and the promotion of industrial upgrading, investors have begun to pay more attention to the company's research and development strength, innovation ability and sustainable development. This means that investors need to consider more factors when making investment decisions, and have higher requirements for market research and judgment.
Some institutional analysts believe that after continuous adjustment, the performance of the A-share core index has begun to slightly better than the core index of some markets such as overseas US stocks and European stocks. The core of the market in the fourth quarter will be to observe the slope of fundamental repair. Other institutions believe that in the third quarter of 2023, the domestic economy is still in the early stage of recovery and has not yet reached the stage of actual recovery. In a weak recovery, growth stocks remain themed. This complex economic situation and market changes undoubtedly put forward higher requirements for investors' judgment.
In summary, although the current market is once again facing a 3,000-point defense battle, there are many differences compared to the previous market environment. Investors need to pay more attention to changes in market structure and changes in investor psychology, while actively looking for quality companies with sustainable growth potential to achieve long-term investment returns. In this 3,000-point battle, we need to recognize the complexity and volatility of the market, and actively seek out investment opportunities to make informed investment decisions.