As of 11 o'clock, a total of more than 4,000 stocks rose, the ChiNext index soared by more than 3.8%, the Shanghai index stood at 3,100 points, and the auto dismantling, real estate development, wind power equipment and other sectors led the rise.
From the perspective of the disk, there are also three major surprises in the market:
First, the real estate sector rose sharply, with real estate ETFs soaring nearly 5% in early trading today. The easing policy in core second-tier cities has increased, which has led to a sharp inflow of foreign capital in early trading.
Second, treasury bond futures dived at the beginning of the session, with the 30-year main contract falling by more than 0.8%, the 10-year main contract falling by nearly 0.4%, and the 5-year main contract falling by nearly 0.3%. At the same time, the dividend index also fell sharply. This means that the whole market has come out of the risk-off phase.
Third, the exchange rate of emerging markets in Asia fell sharply again. The dollar briefly broke through 160 against the yen, and the dollar also rose sharply against the South Korean won.
So, in this context, how will A-shares perform?
Changes in real estate expectations
In early trading today, the performance of the real estate sector can be said to be an important support for A-shares. I love my home, Rongsheng Development, Rongan Real Estate, Tianbao Infrastructure, Fuxing Shares, Gemdale Group and other shares have risen to the limit, and China Fortune, Vanke A, CCCC Real Estate, Dalong Real Estate and other stocks have risen to the top. Real estate ETFs surged nearly 5%.
Judging from the structure of the rise in the Hong Kong stock market, it is also driven by real estate. After 10 o'clock in the morning, the Hang Seng Index and the Hang Seng Technology Index both rose by more than 1%, real estate and big finance rose, Sunac China rose by nearly 20%, and CIFI Holding Group and Shimao Group rose by more than 10%. Insurance stocks that were previously collapsed by real estate have also recovered.
This past weekend, local housing-related policies have been intensively introduced, such as Shenzhen and Nanjing, which have successively announced the implementation of the "old for new" policy for commercial housing, aiming to stimulate the activity of the local property market. At the same time, Chengdu announced the lifting of purchase restrictions to promote the steady and healthy development of the real estate market. Kaiyuan Securities believes that the current signal of stabilizing real estate is clear, and it is expected that the future real estate policy will continue to be loose, and there is still room for the release of housing demand. Megacities are actively and steadily promoting the transformation of urban villages, and more counter-cyclical adjustment measures are expected to be accelerated.
However, judging from the current data, there are still some problems in demand. In the 17th week of 2024, the transaction area of commercial residential buildings in 64 cities across the country was 2.46 million square meters, down 43% year-on-year and up 18% month-on-month, and the cumulative value showed that the transaction area of 64 cities reached 37.26 million square meters year-to-date, down 44% year-on-year. The transaction area of second-hand houses in 17 cities across the country was 1.91 million square meters, with a year-on-year growth rate of -19% and the previous value of -12%, and the cumulative transaction area since the beginning of the year was 24.97 million square meters, with a year-on-year growth rate of -19% and a previous value of -19%.
Risk aversion has fallen
After the real estate market was sung well, the treasury bond market has seen a significant pullback.
Over the weekend, interbank Treasury bonds fell sharply, opening this morning, Treasury bond futures dived at the beginning of the session, the 30-year main contract fell more than 0.8%, the 10-year main contract fell nearly 0.4%, and the 5-year main contract fell nearly 0.3%.
Previously, the relevant parties of the central bank said that the underlying logic of the current long-term treasury bond yield continues to decline is the lack of "safe assets" in the market, and with the issuance of ultra-long-term special treasury bonds in the future, the situation of "asset shortage" will be alleviated, and the yield of long-term treasury bonds will also rise. This expectation management has a certain impact on the treasury bond market.
In addition, overseas expectations for domestic economic growth have also increased significantly. With the release of China's macroeconomic data for the first quarter, a number of foreign institutions, including Morgan Stanley, Goldman Sachs and UBS, have recently raised their forecasts for China's economic growth this year. Looking forward to the future performance of China's economy, Bloomberg recently gave the latest forecast - China will be the largest contributor to global economic growth in the next five years, and its contribution rate will exceed that of all G7 countries combined, almost twice that of the United States.
It is worth mentioning that as Treasury yields have risen, dividend assets have also started to fall. In early trading today, the only sector that fell sharply was the dividend sector. Oil, coal, etc., have become the main force to kill the fall. On the contrary, the growth stocks-based STAR Market and ChiNext have risen sharply, which may indicate that the market's risk appetite is strengthening.
The currency market is still not calm
While the equity market continues to strengthen, the Asian currency market is not calm. In early trading today, the dollar reached above 160 yuan against the yen, and the won also fell sharply, and the baht also fell significantly.
On the news, other countries in Asia are increasingly uneasy about the development of their exchange rates – Indonesia has raised interest rates in response to the weakening of the rupee, Vietnam and India have directly intervened in the foreign exchange market to buy their own currency, and South Korea has said it will follow suit. Today, equity markets across the Asia-Pacific region have not followed the exchange rate. The reason may be that the market is still expecting a move to stabilize the exchange.
The news from the FX market is that, although the Japanese authorities have yet to make a move, FX traders may think that USDJPY's 160 level is enough for them to start reducing some of their exposure to the yen, especially if it soars above that level on Monday. A large integer mark can be used as a signal to call people to reduce some risk, and 160 is certainly in that range. If today's highs are higher than in 1990, USDJPY is back to the levels of the mid-80s of the 20th century, and traders are looking for the next threshold.
From the perspective of A-shares, the current foreign exchange market has not yet reached a risk level sufficient to affect equity. The recent level of transactions has also been quite good. The market may have started to expect some tailwinds from the upcoming high-level meeting. However, on the eve of this long holiday, it is also worth paying attention to whether there will be a change in expectations due to some variables, or whether the time will be delayed.
Editor-in-charge: Yang Yucheng
Proofreading: Gao Yuan