The three major stock indexes collectively rose, is the bottom of the market confirmed?

At the close of trading today, the Shanghai Composite Index was at 2,918.71 points, up 0.57 percent, the Shenzhen Component Index was at 9,257.09 points, up 1.08 percent, and the ChiNext Index was at 1,832.62 points, up 1.65 percent. The turnover of the two cities was 732.4 billion yuan, an increase of 68.8 billion yuan from the previous trading day, and more than 3,500 stocks rose. Today, the net inflow of northbound funds was 2.898 billion yuan and the net purchase was 1.203 billion yuan.

After falling below 2,900 points intraday, the Shanghai Composite Index finally closed in the red today, and the three major indexes also rose collectively, with the ChiNext closing up 1.65%. So, can the market confirm the bottom today and usher in a new round of market? At present, it cannot be confirmed, and the main reasons include:

1. Today's main reason is the over-falling rebound of the gem, the two cities are leading the rise in photovoltaic, lithium and other sectors, the heavyweight stock CATL closed up 4% today, but the key main line of science and technology direction today The money-making effect is not obvious, the reform of state-owned enterprises is still down, and the automobile industry chain is not strong, so today's main thing is to overshoot and reverse, not a strong rebound.

2. The bull market flag-bearer brokerage sector is still closing down today, and the rebound of the Shanghai Composite Index is not enough, and the rebound high is currently suppressed by the 5-day line.

3. Although the turnover is large, it is only 730 billion, and it takes at least 800 billion for the market to stabilize, and 900 billion for the continuous market, and the current turnover is still insufficient. In addition, the Beijing Stock Exchange 50 fell nearly 7% today, and a lot of funds flowed back from the Beijing Stock Exchange, not incremental funds.

4. Liquidity is still tight at the end of the year, and the central bank has not further released liquidity, although it is reported that a number of major banks have lowered the deposit interest rate again, but the loan interest rate has not been adjusted, and a large part of this adjustment is due to the pressure on interest rate spreads, so it has little impact on liquidity.

1. Can the Shanghai Composite Index stand above the 5-day moving average?

2. Whether the turnover can be enlarged to 800 billion.

3. Whether the securities sector can stop falling.

Overview of the broader market

On December 21, the three major A-share indexes collectively closed up. At the close, the Shanghai Composite Index was at 2,918.71 points, up 0.57 percent, with a turnover of 315.9 billion yuan, the Shenzhen Component Index was at 9,257.09 points, up 1.08 percent, with a turnover of 416.5 billion yuan, and the ChiNext Index was at 1,832.62 points, up 1.65 percent, with a turnover of 183.4 billion yuan. The turnover of the two cities was 732.4 billion yuan, an increase of 68.8 billion yuan from the previous trading day, and more than 3,500 shares rose.

In terms of capital flow, the net inflow of northbound funds was 2.898 billion yuan and the net purchase was 1.203 billion yuan, of which the net inflow of Shanghai-Hong Kong Stock Connect was 1.653 billion yuan and the net purchase was 803 million yuan, and the net inflow of Shenzhen-Hong Kong Stock Connect was 1.245 billion yuan and the net purchase was 400 million yuan.

The net outflow of main funds in Shanghai and Shenzhen was 2.167 billion yuan, the net inflow of large orders was 2.527 billion yuan, the net outflow of large orders was 4.694 billion yuan, the net outflow of medium orders was 7.598 billion yuan, and the net inflow of small orders was 9.765 billion yuan.

In terms of plates:

Photovoltaic equipment, brewing industry, games, textile materials industry sectors, as well as BC batteries, TOPCon batteries, blind box economy and other concepts are among the top gainers.

The photovoltaic equipment sector rose by 4.38%, among the constituent stocks of the sector, Tongling shares rose by more than 19%, King Kong PV, Hoymiles shares, GoodWe, Qingyuan shares, Oujing Technology rose by the limit, and Jinlang Technology rose by more than 8%.

In the liquor industry sector, Weilong shares 3 boards, Huangtai liquor industry rose by the limit, and alcoholic liquor rose by more than 7%.

The textile materials sector rebounded, the leading shares 6 days and 5 boards, and the daily limit of Tianchuang Fashion, Anel and Huasi shares.

BC battery concept stocks rose sharply, Tongxiang Technology 20cm daily limit, Yubang New Materials rose more than 11%, Zhongke Cloud Network rose daily limit, and Robotec rose 9.89%.

In terms of decline, the concept of PEEK materials, radio and television, oximeters, as well as instrumentation, automobile services, and non-metallic materials were among the top decliners.

The concept of PEEK material pulled back sharply, and the sector fell by 4.63%. Among the constituent stocks in the sector, Huami New Materials and Fuheng New Materials fell by more than 18%, and Zhongyan shares fell by more than 7%.

In the instrument dashboard block, Chicheng shares, Canneng Power, Tiangang shares, Audiwell, Yada shares, Boxun Biotechnology, Zhonghuan shares, etc. fell to the limit.

In the auto service sector, Dezhong Automobile fell to the limit, and *ST fell more than 5% in the medium term.

In the non-metallic materials sector, Benlang New Materials and Ningxin New Materials fell to the limit, Bingyang Technology fell by more than 9%, and Dongfang Carbon, Huifeng Diamond, and Tianma New Materials fell by more than 7%.

Market analysis

Overall: Jufeng Investment Consultant pointed out that the market bottomed out on Thursday, and the BC battery sector was among the top gainers. As the endogenous momentum of the economy continues to increase, the economic fundamentals will continue to improve, which will form a strong fundamental support for the repair of the market, and the market will still be dominated by structural conditions in the short term. It is worth noting that northbound funds are beginning to pick up, and the end of the Year of the Rabbit is a good opportunity to open positions. In terms of market opportunities, it is recommended to continue to pay attention to opportunities in sectors such as new energy vehicles, food and beverage, consumer electronics, and communication equipment.

Huaxi Securities said that there is sunshine at the end of the tunnel, and the A-shares in the future will transition from trading "policy expectations" to "policy effects". With the implementation of the policy of activating the capital market, the micro liquidity of the market has improved, such as the IPO has slowed down significantly, the equity ETF has returned to net subscription, and the important shareholders have turned to the secondary market to increase their net holdings.

Guosheng Securities research report pointed out that in the medium term, with the improvement of economic expectations is expected to promote the recovery of corporate earnings, and the valuation of the A-share market is even lower than the beginning of 2016 and the end of 2018, superimposed by the Federal Reserve gradually started the interest rate cut cycle, the spread between Chinese and US Treasury bonds is expected to narrow, the dollar is expected to weaken, and the A-share center is expected to rise. In the short term, the index is still suppressed by the 5-day moving average, and if the market continues to adjust, then the index may stop falling and stabilize near last year's double bottom of 2863 and 2885 points, ushering in a rebound. Strategically, as high-level stocks begin to make up for the decline, the market presents a high-low switching pattern, and it is recommended to pay attention to the opportunities for artificial intelligence technology stocks with good fundamentals and relatively low stock prices.

Judging from the trend of the representative sectors:

▍Photovoltaic equipment:

On the news side, from January to October 2023, 142.56GW of new domestic photovoltaic capacity will be added, a year-on-year increase of 145%. Driven by the traditional PV installation peak season in the fourth quarter, terminal demand is expected to continue to be released, further refreshing the record of new domestic PV installations throughout the year.

In addition, on December 19, LONGi Green Energy's official Weibo announced that the Heterojunction Back Contact (HBC) solar cell independently developed by LONGi Green Energy uses all-laser patterning mass production process technology to achieve a cell conversion efficiency of 27.09%, creating a new world record for the efficiency of monocrystalline silicon solar cells, which is the second step in November 2022 created by LONGi Green Energy to create 26.81% Another breakthrough after the world record for the efficiency of silicon solar cells.

In a recent research report, Debang Securities believes that the photovoltaic industry is expected to usher in a significant recovery, and the following directions can be focused on in the future: 1) integrated module companies with the advantages of rising volume and profit and new cell technology, 2) cell sector with high profit certainty and the emergence of new technologies, 3) silicon wafer companies with their own efficiency or volume increase logic, and 4) leading inverter companies that benefit from the increase in total volume.

▍Brewing industry:

On the news side, the recently released "2023 Annual Report on the Development of China's Liquor Industry" shows that the leading liquor companies continue to grow, the regional liquor industry is growing rapidly, and the industry as a whole has a structural differentiation process.

Wanlian Securities believes that in the short term, with the continuous recovery of the economy, there is still room for improvement in the demand for liquor business banquets; in the long run, the liquor industry is in the era of stock competition, branding, quality as the development direction, industry concentration continues to increase, differentiation is also intensifying.

Guosen Securities pointed out in the research report that the valuation of the liquor industry has fallen to a low level in the past ten years. The analysis believes that at present, the fundamentals of liquor are continuing to be repaired, but the market's long-term growth rate expectation of liquor has been as low as freezing, and the valuation has also fallen back to the previous low, so the sector has a basis for rising.

▍Textile Materials:

Everbright Securities said that the total retail sales of consumer goods improved month-on-month in November. From the perspective of sub-categories, benefiting from the cooling in November, textiles and apparel were the sub-categories with the highest year-on-year growth rate in commodity retail sales in November. In the short term, the New Year's Day holiday is approaching, and it is recommended to pay attention to the relevant beneficiary targets. In the long run, we will continue to be optimistic about the moderate recovery of consumption, and we will be optimistic about the optional categories with relatively large elasticity.

Zhongtai Securities Research Report pointed out that looking forward to 2024, the textile and garment industry is expected to travel lightly, focusing on the growth of the segment track and the elasticity of low valuation.

Message-wise

1. According to the person in charge of the Department of E-commerce of the Ministry of Commerce, from January to November, the national online retail sales reached 14 trillion yuan, a year-on-year increase of 11%, and the contribution rate of physical network zero to the growth of social zero reached 31.4%, accounting for 27.5% of social zero, a record high. (Good for the concept of e-commerce)

2. China Merchants Bank shares have recently received two cases of increase in holdings. According to the data, on December 14, JPMorgan (JPMorgan) increased its position by 19.0997 million shares at an average price of HK $24.5836 per share, involving about HK $470 million. After the increase, JPMorgan Chase & Co. has a new long position of 331,035,542 shares, and the long position ratio has increased from 6.79% to 7.21%, exceeding the level of about 7% at the beginning of this year. BlackRock increased its position by 2,088,500 shares at an average price of HK$25.798 per share on December 15, involving about HK$53,879,500. After the increase, BlackRock, Inc.'s latest long position is 275,943,745 shares, and the long position ratio has increased from 5.97% to 6.01%. (Positive for the banking sector)

3. Goldman Sachs recently released its outlook for China's stock market in 2024. Goldman Sachs Research Chief China Strategist Liu Jinjin and his team remain cautiously optimistic about China's stock market, believing that the improvement in economic conditions is expected to drive corporate earnings recovery, and maintain an "overweight" stance on A-shares as valuations are at historically low levels. Goldman Sachs Research expects earnings growth of 10% and 11% respectively in 2024 for the MSCI China Index and CSI 300 Index, which is close to this year's performance. (Positive market sentiment)

4. On December 20, it was reported in the market that Longfor Group repaid a syndicated loan of HK$2 billion in advance on the same day, with a total amount of HK$15.3 billion and due in January 2024. Previously, Longfor had repaid HK$13.3 billion in advance, and after this repayment, the loan has been fully repaid in advance in 2023. A person close to Longfor Group said that the news was true. (Good for the real estate sector)