A-shares continued to grind the bottom at the beginning of the year, and the GEM index fell by more than 6% in a week
A-shares, which underperformed in 2023, will still start 2024 in a sluggish start.
On January 5, the three major A-share indexes collectively closed down, with the Shanghai Composite Index falling 0.85% to 2,929.18 points, and the ChiNext Index falling 1.45%. In the first week of 2024 (4 trading days in total), the Shanghai Composite Index fell by 1.54%, the Shenzhen Component Index fell by 4.29%, and the ChiNext Index fell by 6.12%.
Market researchers believe that the current market risk aversion is heavy due to factors such as fluctuations in macroeconomic expectations, falling expectations of the Federal Reserve's interest rate cuts, and collective declines in external markets. However, the valuation of the A-share market is at a historically low level, and there is no need to be overly pessimistic about the market outlook. CITIC Securities expects that the market will usher in an important inflection point in January.
The GEM index hit a new low in the past four years
"There has been a certain adjustment in the market at the beginning of the year, which has made many people lose confidence again. I believe that when making investments, we must look at the medium and long term, and don't pay too much attention to short-term fluctuations. In the short term, the market may have certain shocks and repetitions, and bottoms are always produced in despair. Yang Delong, chief economist of Qianhai Open Source Fund, told reporters.
On January 5, pessimism once again enveloped A-shares, and the three major indexes collectively fell sharply. The Shanghai Composite Index fell more than 1.2% intraday, falling as low as 2,916.72 points, and finally closed down 0.85% to 2,929.18 points; the Shenzhen Component Index and the ChiNext Index closed down more than 1%, both of which fell for four consecutive trading days; and the ChiNext Index closed at 1,775.58 points, a new low in the past four years.
The STAR 50 Index closed down nearly 2%, and the Beijing Stock Exchange 50 Index, which had risen sharply against the trend in the early stage, closed down more than 4% under a sharp correction.
On the disk, most of the 31 Shenwan first-class industries fell, and only the two industry sectors of banking and household appliances rose slightly against the trend, with an increase of 1.07% and 0.98% respectively. National defense and military industry, communications, media, medicine and biology, computer and other industry sectors fell first, down 3.13%, 2.63%, 2.38%, 2.03%, and 1.95% respectively.
The full-day turnover of A-shares was about 754.8 billion yuan, an increase of about 64.585 billion yuan from the previous day. Northbound funds had a net inflow of nearly 2 billion yuan throughout the day, including 1.56 billion yuan for Shanghai-Hong Kong Stock Connect and 430 million yuan for Shenzhen-Hong Kong Stock Connect.
At the individual stock level, a total of 4,759 stocks closed down in the whole market, only 506 stocks rose, 30 stocks with a limit and 20 stocks with a limit down.
External markets are similarly depressed
In the first week of 2024, the Shanghai Composite Index fell by 1.54%, the Shenzhen Component Index fell by 4.29%, the ChiNext Index fell by 6.12%, the STAR 50 Index fell by 5.2%, the Beijing Stock Exchange 50 Index fell by 3.05%, and the CSI 300 Index fell by 2.97%.
In the past 2023, the Shanghai Composite Index fell by 3.7% for the whole year, the ChiNext Index fell by more than 19% for the year, and the performance of A-shares was unfortunately the lowest among the world's major stock markets. The start of 2024 is still sluggish, leaving investors disappointed.
It is worth noting that in the first week of the new year, not only A-shares, but also major peripheral stock markets performed sluggishly.
Wind data showed that the three major U.S. stock indexes fell collectively in the first week of the new year, with the S&P 500 down 1.52% for the week, the Dow down 0.59%, and the Nasdaq down 3.25%. The UK's FTSE 100 index, Germany's DAX 30 index, and France's CAC 40 index fell by 0.56%, 0.94%, and 1.62% respectively in the first week. In addition, the Nikkei 225 fell 0.26% in the first week, and the KOSPI fell 2.91%.
Xingshi Investment told the "China Times" reporter that the sentiment of the A-share market in 2024 will fall compared with the end of 2023, the transaction volume will shrink slightly, and the market risk aversion will be heavier. On the one hand, due to factors such as the PMI in December 2023 falling short of expectations and the per capita consumption on New Year's Day has not yet recovered to the level of the same period in 2019, the domestic economic expectations are at a low level.
He pointed out that due to the resilience of the U.S. employment data and the cautious minutes of the Federal Reserve's interest rate meeting, coupled with the relatively crowded trading of the market's expectations for the Fed's interest rate cut in the early stage, the market's more optimistic interest rate cut expectations in the early stage have fallen. Judging from the CME Fed's Fed Watch tool, the current market is basically sure that the Fed will keep interest rates unchanged at the January interest rate meeting, while the probability of a rate cut at the March meeting will fall back to 62.7%. In addition, the decline in interest rate cut expectations has also led to an increase in US Treasury rates and the US dollar index.
The agency said that January ushered in an important inflection point
At the time of the market downturn, some institutional researchers firmly believe that the current valuation of the A-share market is at a historical low, and a market rebound may occur at any time.
"Some people say that when all retail investors are afraid to look at the account, it is often the time to bottom, which actually means that when investor sentiment is at its lowest, it is when the market bottoms out. Nowadays, many investors are afraid to look at their accounts, and the number of accounts that are actively trading every day is getting smaller and smaller, which is a characteristic of the market bottoming. Yang Delong said.
He believes that the A-share market in 2024 has kicked off, and from the policy perspective, the policy will continue to amplify the recruitment to promote economic recovery. In the context of economic recovery, the performance of many good companies will also be gradually released, which will promote the valuation repair of many high-quality leading stocks. At this stage, the market should be said to have gradually completed the process of bottoming, and is expected to enter the stage of trading from the left to the right.
On the afternoon of January 5, at the annual meeting of Chinese institutional investors hosted by China Times, Zheng Zheng, investment director of the first department of diversified asset management of Bosera Fund, said that the stock market is the barometer of the economy, and with the successful switch of China's new economic momentum, the pessimism of the market will also be repaired, and the current position does not need to be too pessimistic.
Xingshi investment related people believe that the current lack of market confidence is still the main constraint, superimposed on the bottom of the stock game, the stock market's response to good information is relatively flat. Looking ahead, the stock market sentiment to get rid of the low level may still need the policy effect to continue to appear, but the low valuation still provides a certain investment safety cushion for excellent companies, and the accumulation of positive factors means that the stock market resilience may not be weak after the market sentiment recovers.
CITIC Securities said in the latest research report that it is expected that the economic policy will continue to increase in January, the New Year's Eve effect of various capital behaviors will be more obvious, investor confidence will begin to turn positive, and the market will usher in an important inflection point in January.
Editor-in-charge: Ma Xiaochao Editor-in-chief: Xia Shencha