On October 15, the market fluctuated and fell throughout the day, and the GEM index led the decline. At the close, the Shanghai Composite Index fell 2.53%, the Shenzhen Component Index fell 2.53%, and the ChiNext Index fell 3.22%.
In terms of sectors, e-commerce, games, military industry, ST and other sectors were among the top gainers, while oil and gas, securities, industrial metals, coal and other sectors were among the top decliners.
On the whole, stocks fell more and rose less, and more than 4,400 stocks in the whole market fell. The full-day turnover of the Shanghai and Shenzhen stock markets was 1.63 trillion yuan, a decrease of 205 million yuan from the previous trading day.
In the first 50 minutes of trading this morning, the market opened low and went high, and the three major indexes once turned red.
But the momentum of the repair quickly faded, and the broader market continued to weaken since 10:22. The Shanghai Composite Index closed at 3201.29, the lowest of the day.
It is not difficult to find that the biggest variable is not the market sentiment, nor the shrinkage of volume, but the obvious depreciation of the RMB exchange rate during the A-share trading session.
At about 13:48, the offshore yuan fell more than 350 points against the US dollar during the day to 7.1316. The decline did not pick up until around 14 o'clock, back above 7.12.
Partly affected by this, the FTSE A50 futures index also turned lower in early trading after some resistance.
Therefore, today's review has to start with the exchange rate.
Recently, the foreign exchange market and the stock market have diverged
Why?
Before and after the National Day, A-shares generally rose sharply. Of course, we also know that there was a pullback in the overall market last week.
However, the style of painting in the foreign exchange market is different. Since September 27, after "breaking 7", as of yesterday, the offshore exchange rate of the US dollar against the yuan has depreciated from around 7.0 before the holiday to around 7.1.
Today's intraday fall below 7.13 made the K-line chart of the offshore RMB exchange rate "break through the moving average suppression".
Although northbound funds no longer disclose intraday movements, from historical experience, when the RMB exchange rate depreciates, foreign investors often choose to sell RMB assets and repatriate US dollar assets to avoid exchange rate risks, which will also lead to northbound capital outflows, resulting in more sell-offs in the market.
In a sense, this can be regarded as the direct cause of the continued weakening of the intraday market.
Wells Fargo Fund analysis said that recently, the strength of the dollar index is the main reason for the depreciation of the yuan against the dollar. United States non-farm payrolls data for September released during the National Day exceeded expectations, with non-farm payrolls increasing by 254,000 in September, far exceeding expectations of 150,000 and the largest increase since March 2024, and the unemployment rate fell to 4.1%, lower than expectations and the previous value of 4.2%. In addition, the United States ISM services PMI recorded 54.9 in September, higher than the expected 51.7, indicating that the United States economy remains highly resilient, supporting the rapid rise of the dollar index.
In a strong US dollar environment, many major currencies retreated. Domestically, spurred by a series of supportive policies, China's asset attractiveness has rebounded overall, with the renminbi depreciating relatively low and remaining strong against a basket of currencies other than the US dollar.
It further pointed out that the Fed may slow down the pace of interest rate cuts, and the subsequent dollar index may continue to remain relatively strong, coupled with risk disturbances such as the United States election and geopolitical conflicts, as far as external factors are concerned, the pressure on RMB depreciation still exists. Looking ahead, whether the renminbi can get rid of depreciation pressure still depends on the effect of domestic fundamental repair, starting from internal factors, the focus is on the implementation of supportive policies. Overall, there is a high probability that the USD/RMB exchange rate will continue to fluctuate in a narrow range in the near future.
Huawei's concept rose and fell
Three directions to take the baton
In early trading, Huawei's industrial chain continued to be strong yesterday, once leading the rise, and the leading stock Runhe Software had a full-day turnover of 25.388 billion yuan, ranking first in the A-share turnover list, but closed down 0.73%, and the sector also fell subsequently.
Intraday baton against the trend to lead the rise, is the game, film and television, media, as well as Internet e-commerce and yesterday was more active in a few industries such as military electronics, military equipment, etc.
1) Game media
According to the research report of China Securities Construction Investment, the recent intensive testing of new game products, including the first round of testing of Kaiying Network's "Douluo Continent: Legend of the Evil Spirit", the test data of "Dragon Nest World" is eye-catching, and the first round of deletion test of "Tomb Robbery Notes: Departure" at the end of September; Gigabit's "M72" and "M88" both ended the first round of paid testing.
On the demand side, the market size of domestic games from January to August this year increased by 3.3% year-on-year, and old games and new games worked together. On the supply side, the number of editions from January to September has exceeded 1,000, a year-on-year increase of about 37%, and the supply side is still very sufficient. In addition, with the introduction of the new M&A regulations, it is expected that the market-oriented M&A and restructuring of the game industry will return to the right track.
2) Internet e-commerce
On the news side, at 8 p.m. on October 14, Tmall and Jingdong's "Double Eleven" activities were opened. This year, "Double 11" opened ahead of schedule, becoming the e-commerce shopping festival with the longest time span. For the first time, the two major e-commerce giants of Tmall and JD.com have realized the simultaneous opening of "Double 11", which is 10 days earlier than in previous years when the pre-sale activities were opened around October 24.
In addition, the hype logically suggests that this sector is also related to the concept of cross-border payments.
Last Sunday (October 13), UnionPay International and Viet Nam National Payment Corporation (NAPAS) signed a memorandum of cooperation in Hanoi, agreeing to deepen cross-border QR code interconnection cooperation and promote UnionPay QR code wallets and Viet Nam local wallets to scan QR code payments on each other's networks.
3) Military industry
In terms of industry, the recent ship restructuring has been launched, Chengfei's listing is imminent, and mergers and acquisitions have once again entered an active period.
For example, AVIC, which acquired Chengfei Group, on the basis of yesterday's 20cm limit, today's intraday stock price hit a record high of 82.76 yuan and then fell.
According to some analysts, there are many central state-owned enterprises in the military industry, and there are a large number of advantageous assets in vitro, so they naturally have the advantage of restructuring. At the same time, in terms of fundamentals, since the beginning of this year, many companies have disclosed new orders, and the inflection point of demand has come. After nearly 2 years of industry rectification, the military sector is now at a historic bottom, and it is recommended to pay attention to the rhythm of military orders in the fourth quarter.
Investments are risky, and independent judgment is important
This article is for reference only and does not constitute a basis for trading, and you enter the market at your own risk.
Cover image source: Screenshot of market software by reporter Zhao Yun and editor by Xiao Ruidong