On July 22, 2024, the three major indexes of the A-share market opened low and moved low, maintaining a volatile trend throughout the day, and finally closed slightly lower. The Shanghai Stock Exchange 50 Index stopped for 9 consecutive days, and concept stocks such as software and wind power rose sharply against the trend, and the market showed a structural market. Based on the latest market data and information, this article will provide an in-depth analysis of the recent performance of the A-share market and explore future investment opportunities.
1. Market Overview: Shock adjustment, valuation advantage appears
On July 22, the main indices of the A-share market were mixed, with the Shanghai Composite 50 Index falling nearly 1% and the CSI 300 Index also falling more than 0.6%. The GEM index performed relatively strongly, edging down 0.09%. From the perspective of trading volume, the turnover of the Shanghai and Shenzhen markets shrank by 13.3 billion compared with the previous trading day, and the market has a strong wait-and-see mood.
Judging from the recent market performance, the A-share market as a whole has shown a pattern of shock adjustment. On the one hand, the domestic economic recovery has been less than expected, corporate earnings growth has slowed, and market confidence has been suppressed to a certain extent. On the other hand, the Fed's interest rate hike expectations have risen, and global liquidity has tightened, which has also put some pressure on the A-share market.
However, from a valuation perspective, the valuation advantage of the A-share market has begun to emerge after the previous adjustment.
The data shows that the PE and PB quantiles of major indices such as the Shanghai Stock Exchange 50 and the CSI 300 are at historically low levels, indicating that the market valuation has entered a reasonable range, and some sectors have even seen obvious valuation depressions.
2. Industry sectors: Structural opportunities are highlighted, and technology and consumption are in focus
From the perspective of industry sectors, the A-share market has shown obvious structural conditions recently. Conceptual sectors such as software, information innovation, and wind power were among the top gainers, while traditional industry sectors such as liquor, duty-free, and banking were weak.
Specifically, the technology sector has become the biggest bright spot in the market recently. On the one hand, national policies continue to increase the development of emerging industries such as digital economy and artificial intelligence, providing strong policy support for the technology sector. On the other hand, technology companies continue to increase R&D investment, and innovative achievements continue to emerge, which also injects new vitality into the development of the industry.
The recent performance of the consumer sector has been relatively differentiated. Affected by the slower than expected economic recovery, the performance of optional consumption sectors such as liquor and home appliances was sluggish. However, the essential consumer sectors such as medicine and biology, food and beverage showed strong resistance, showing the recognition of market funds for consumption upgrading and the long-term development prospects of the industry.
3. Investment outlook: grasp the structural market and pay attention to the matching degree between valuation and growth
Looking ahead, the A-share market as a whole will remain volatile, but the structural market will be more prominent. Investors need to pay more attention to the selection of individual stocks and grasp the market rotation opportunities.
Specifically, the following investment opportunities are worth paying attention to:
1. Low-valuation, high-dividend sectors. In the current market environment, sectors with low valuations and high dividends have a high margin of safety and investment value, such as banks, real estate, utilities, etc.
2. Industries that benefit from policy support. Industries such as digital economy, artificial intelligence, and new energy are strongly supported by national policies, and have broad room for future development, such as software, chips, photovoltaics, etc.
3. High-quality leading enterprises with stable performance growth. No matter how the market environment changes, high-quality leading enterprises with stable performance growth always have high investment value, such as leading enterprises in food and beverage, pharmaceutical and biological, high-end manufacturing and other industries.
In short, the A-share market is in a critical period of transformation and upgrading, with increasing market volatility, but at the same time, it is also pregnant with new investment opportunities. Investors need to remain rational, select individual stocks, and grasp the structural market in order to obtain ideal investment returns in a volatile market.