Event:
On March 9, the shock in the A-share market intensified. The Shanghai index once fell below 3200 points, with a maximum decline of more than 4%. The rebound in the late trading narrowed the decline, but the daily K-line closed negative for five consecutive days, the individual stock sector fell generally, and the trading volume was enlarged to 1.16 trillion. The Shenzhen composite index fell by 62.5% since the 9th of this week, and the Shenzhen composite index fell by 6.01%.
Comments:
1. The accumulation of internal and external risk factors has led to a continuous correction in the market since March.
Since March, the A-share market has been in the trend of shock correction. The Shanghai index has continuously fallen below the integer mark of 3400 and 3300, and other indexes have generally been in the doldrums. In particular, there was panic selling pressure in the market on March 9, and the Shanghai index once fell below 3200. While the market continued to decline, the trading volume of the two cities continued to increase. The trading volume of the two cities exceeded 1.1 trillion yuan on March 8 and March 9, indicating that the release of selling pressure is more obvious and has a great impact on the short-term market. Individual stock sectors generally fell. In the past three days, social services, medicine and biology, household appliances, petroleum and petrochemical, transportation and other sectors fell significantly, and only architectural decoration and comprehensive sectors fell less than 3%.
The market correction was mainly caused by the aggregation of internal and external risk factors such as geopolitical events in Russia and Ukraine, inflation expectations, the upcoming implementation of overseas policies, institutional position adjustment and capital fluctuation, resulting in increased market volatility.
(1) the uncertain situation in Russia and Ukraine has pushed up global commodity prices and increased inflationary pressure. The prospect of the conflict between Russia and Ukraine is still uncertain, and the follow-up will continue to ferment. In particular, recently, the president of the United States officially signed an executive order prohibiting the United States from importing energy from Russia, which has an impact on the global energy supply market. At present, Russia is an important exporter of global oil and natural gas. With the continuous conflict between Russia and Ukraine and the escalation of sanctions, it has a great impact on the prices of oil, natural gas and other commodities. At present, there is a general sharp upward trend, which will increase the pressure of global inflation. Recently, Brent crude oil futures once stood at $130 / barrel, with an increase of more than 30% in March. European natural gas futures broke through $3000 per thousand cubic meters, reaching a new high. In addition, nickel, aluminum and Shenzhen Agricultural Products Group Co.Ltd(000061) also rose one after another. Considering the uncertainty of the conflict between Russia and Ukraine and the cut-off of the Russian swift system in the later stage, it still has an impact on the subsequent commodity prices.
(2) the Fed's interest rate hike and the turmoil in overseas markets are also important factors for market weakness. On the one hand, in mid March, the Federal Reserve will hold an interest rate meeting in March, and the market is expected to raise interest rates by 25 basis points. Under the influence of geopolitics, the year-on-year increase rate of CPI in the United States in February was further expanded compared with that in January this year. In the context of rising inflation, it is not ruled out that the Fed will curb inflation by continuously raising interest rates. As the anchor of the global stock market, the increase of the benchmark interest rate of the Federal Reserve will release greater pressure on the stock market. Before the boots landed, the market's short-term sentiment tended to be cautious. On the other hand, from the perspective of the trend of the external market, March also showed a general downward trend. As of March 8, the NASDAQ index of the United States fell 6.95%, the S & P 500 fell 4.65%, the French CAC40 index fell 10.46%, while the Hang Seng Index of Hong Kong also fell sharply. The continued weakness of the external market also caused emotional disturbance to the trend of a shares.
(3) the fund issuance was sluggish and the net outflow of northward funds continued to increase, exacerbating the pressure on short-term funds. On the one hand, affected by the weak market, this year's fund issuance was cold. From January to February 2022, the total issuance share of the whole market fund was 107.27 billion, which was even lower than the new issuance share in the same period of 2016 and 2018, a new low since 2015. The downturn in fund issuance and the redemption pressure of stock funds have significantly weakened the strength of incremental funds in the equity market. On the other hand, there are also obvious signs of outflow of northward funds in the near future. Since March 7, there has been a significant net outflow of northbound funds for three consecutive days. Among them, on March 9, the net outflow of northbound funds per day was 10.935 billion yuan, and the net sales per day reached a recent high, while the net outflow of northbound funds on March 7 and March 8 exceeded 8 billion yuan. Although compared with the market value of its trillions of positions, the scale of net sales is not too large, behind its large net sales, the willingness to avoid risks and adjust positions and structure is more obvious, exacerbating the pressure on short-term funds.
(4) release of market sentiment and leveraged capital pressure. As the panic caused by the continuous decline has intensified, especially the rapid rebound after the rapid adjustment in the session on March 9, coupled with the release of energy in the two markets, it shows that the release of emotion in the session is more obvious. In addition, the scale of margin trading and securities lending has shown a continuous downward trend recently. With the intensification of market fluctuations, the leveraged funds on the floor will also face selling pressure. It is not ruled out that the moderate release of pressure may suppress the short-term trend.
On the whole, the main reason for the continuous adjustment of the market is the inflation expectation caused by overseas geopolitical events, the landing of overseas policies and the adjustment of China's capital position, which is caused by the aggregation of internal and external risk factors.
2. The economic foundation remains unchanged. After the release of short-term selling pressure, the medium and long-term layout may be gradually opened
The short-term market volatility has increased and the trend has been repeated. However, it does not constitute a systematic risk at present, especially from the perspective of China's economic fundamentals, capital, exchange rate and other factors, there is no obvious sign of deterioration. The market correction belongs to the release of emotion under the impact of short-term multiple factors. With the clear policy expectations of the two sessions and under the background of stable growth, The market still has opportunities for gradual stabilization and improvement, and the medium and long-term layout is expected to be gradually opened.
(1) the two sessions set the tone of "steady growth", and China's fundamentals are still relatively stable. According to the recently released PMI data, the manufacturing PMI index recorded 50.2% in February, up 0.1 percentage point month on month compared with January, and was on the 50% boom and bust line for four consecutive months. The manufacturing outlook rebounded steadily and the economic fundamentals were generally stable. In addition, in terms of prices, China's PPI rose by 8.8% in February, down 0.3 percentage points from January. Recently, frequent geopolitical factors have led to renewed tension in supply and demand, and commodity prices have continued to rise. The year-on-year growth rate of PPI may remain high and volatile in the short term, but CPI remains stable, up 0.9% year-on-year. High commodity prices or increased pressure on enterprise production and operation still need policy support. In addition, the GDP growth target set by the two sessions in 2022 is about 5.5%, which is basically in line with market expectations and establishes the working idea of "stable growth" throughout the year. This growth target is medium and high-speed growth on a high base. It is expected that the subsequent domestic demand such as investment and consumption may continue to make efforts to promote the smooth operation of the economy, and relevant policies are expected to be gradually implemented after the two sessions.
(2) the balance profit handed over by the central bank exceeded 1 trillion, and efforts were made to stabilize the macro-economic market. Recently, the people's Bank of China has turned over the balance profits to the central government in accordance with the law, with a total amount of more than 1 trillion yuan, which is mainly used to offset tax rebates and increase transfer payments to local governments, so as to support the relief of enterprises, stabilize employment and ensure people's livelihood. The balance profits handed over by the central bank will not increase the burden of taxes or economic entities, nor will it be a fiscal deficit. It will provide financial support for the central government, reflecting the coordination and linkage of monetary policy and fiscal policy, and work together to stabilize the macro-economic market.
(3) from the perspective of capital itself, there is no "money shortage" situation, but more short-term internal capital flow. The government work report of the two sessions clearly pointed out that we should strengthen the implementation of prudent monetary policy, give full play to the dual functions of the total amount and structure of monetary policy tools, and provide stronger support for the real economy, including expanding the scale of new loans. In January this year, the central Bank asymmetrically lowered the LPR interest rates for one-year and five-year periods, continuously fulfilled the reduction of reserve requirements and interest rates, and strengthened its determination to stabilize economic growth.
Although the central bank has moderately recovered liquidity in the open market recently, the overall interest rate trend is stable. For example, the current trend of the yield to maturity of one-year and 10-year bonds is relatively stable, and the overall capital demand is relatively stable. There is no "money shortage" or obvious rise in interest rates. The interest rate spread between China and the United States has narrowed, but it is still in a more comfortable range; In terms of exchange rate, the expectation of steady growth has been strengthened, and the performance of RMB exchange rate is relatively strong. Therefore, the capital fluctuation of the market still lies in the short-term fluctuation caused by internal capital position adjustment and risk control.
(4) the policy strengthens financial risks, fully implements the registration system, and the capital market is stable, and the expectation is still strong. The 2022 government work report mentioned the need to "handle major financial risk events safely" and "fully implement the stock issuance registration system" to promote the steady and healthy development of the capital market. Especially in the context of rising inflation and the gradual shift of monetary policies in major economies, the management has repeatedly emphasized strengthening financial risks, especially facing the task of fully implementing the registration system this year. Maintaining the stable and healthy development of the capital market is also the policy direction in the future.
(5) from the technical point of view, the short-term adjustment is relatively sufficient, and the probability of panic selling is small. On March 9, the three major indexes opened high and went low. The index showed a deep V-shaped trend in the afternoon. At one time, the three major stock indexes fell by more than 4%, and the Shanghai index fell below 3200 points, but then bottomed out and rebounded, narrowing the decline to 1%. From an annual perspective, the callback range of the three indexes is not small. With the gradual release of the selling pressure brought by the market's concern about the peripheral environment, the impact of the peripheral environment on the market will gradually weaken. Driven by factors such as the recovery of stability maintenance expectations of the two sessions, the continuous force of steady growth policy and the overall stability of capital, the probability of panic decline is small, and the market does not have the basis for continuous sharp correction.
It can be seen that due to the continuous fermentation of the conflict between Russia and Ukraine and the impact of factors such as the US Federal Reserve's interest rate hike, the global capital market has experienced a correction as a whole. Under the influence of various risk factors, the Chinese market also shows a pattern of continuous weakness. The short-term market is still weak, but the selling pressure caused by the market's concerns about the external environment is gradually released, and the market correction in the short term is relatively sufficient. It is not appropriate to be overly pessimistic in the short term. Under the influence of the positive signals released by the current two sessions, the sustained force of the steady growth policy, the relatively stable performance of capital, the continuous promotion of subsequent monetary policies and other positive factors, There are technical repair opportunities in the market. In the medium and long term, with the gradual easing of external risk factors, the market will gradually stabilize and the market will enter the window period of layout.
In terms of operation, it is recommended to maintain balanced allocation and do a good job in the layout of the middle line in the repeated market shocks. In terms of industry, pay attention to two main lines. One is the main line of stable growth. It is suggested to pay attention to finance, steel, building materials, building decoration and other sectors; Another suggestion is to pay attention to the food and beverage, electrical equipment, medicine, TMT and other sectors gradually adjusted in place.
Risk tips
Deterioration of overseas epidemic situation; Sudden changes in the external environment.
