Following the sharp fall in the first week after the National Day, A-shares were generally volatile in the first four days of this week, and launched a counteroffensive on Friday, with technology stocks such as chips rising significantly. The Shanghai Composite Index rose 1.36% to 3,261.56 points for the week, while the Shenzhen Composite Index, ChiNext Composite Index, STAR 50 and Beijing Stock Exchange 50 rose by 3.92%, 6.85%, 8.87% and 22.54% respectively. After the National Day, A-shares fell sharply after a short period of rise, and a large number of high-level A-shares sold out, resulting in a large number of new shareholders entering the market before and after the National Day. Heading into the week, there were already many signs that management was interested in reassuring the market, so the stock market gradually stabilized and rebounded. According to the website of the central bank on Friday, the swap facilities for securities, funds and insurance companies aimed at supporting the capital market will be officially launched from now on, and the policy documents on stock repurchase and special relending for increasing holdings will also be released and implemented on Friday. Also on Friday, Pan Gongsheng, governor of the central bank, said at the annual meeting of the 2024 Financial Street Forum that the reserve requirement ratio will be further reduced by 0.25~0.5 percentage points before the end of the year or depending on the liquidity situation. It is worth noting that the stock market rose a lot on Friday, but gave up a lot in the last 20 minutes, which generally indicates that the market risk awareness has increased significantly after the pullback in the first week after the holiday. The rapid decline in the end of the market is likely to bring some shock to the stock market at the beginning of next week, but I personally think it is not all bad, because the market is overly excited, which is not conducive to the long-term market. Over the next week or two, markets will be playing around the exact number of fiscal stimulus, as the market believes that the key message may be clear during the important month-end meeting. Ordinary investors have limited access to information or prediction in this regard, but they can look for clues from the stock market. Generally speaking, if the stimulus policy is stronger than expected, the stock market tends to perform earlier and the amount of energy will be more abundant. In terms of operation, it is recommended that investors buy dips and avoid excessive chasing up. In the short term, since the LPR rate will be cut next Monday, investors do not need to rush to chase the rise just because of the rate cut signal, and should wait for the stock index to retreat before considering buying. Investment is risky, independent judgment is very important, this article is for reference only, does not constitute a basis for trading, enter the market at your own risk.
Cover picture source: Photo by Liu Guomei, Daily Economic News
