Since March, the A-share market has continued to adjust. As of March 28, the Shanghai index, Shenzhen Component Index and gem index have fallen by 7.16%, 11.19% and 9.97% respectively. Recently, the turnover of A-Shares continued to shrink, and there were many bottoming signals in the market. Analysts said that at present, A-Shares have fallen back to the level of undervalued value and have good medium and long-term investment performance price ratio.
coal real estate sector strengthened against the market
On March 28, the A-share market adjusted again, with 1782 rising stocks and 2743 falling stocks in Shanghai and Shenzhen.
Among shenwanyi industries, coal, real estate and media industries led the increase, rising by 3.11%, 1.99% and 1.40% respectively; Food and beverage, defense and military industry and power equipment industry led the decline, down 2.07%, 1.87% and 1.56% respectively. In the coal industry, China Shenhua Energy Company Limited(601088) , Yankuang energy rose more than 7%. In the real estate industry, Tianjin Realty Development (Group) Co.Ltd(600322) , Tahoe Group Co.Ltd(000732) , Yango Group Co.Ltd(000671) , China World Trade Center Co.Ltd(600007) and other stocks rose by the limit.
Since March, the Shanghai Composite Index, Shenzhen Composite Index and gem index have fallen by 7.16%, 11.19% and 9.97% respectively. During the period, among the Shenwan level industries, only coal, real estate, comprehensive, communication, agriculture, forestry, animal husbandry and fishery industries rose, while household appliances, food and beverage, electronics, power equipment and other industries fell significantly.
Tong Diyi, general manager of longying fuze assets, told the China Securities Journal that recently, A-Shares have experienced a wave of major adjustment, which is caused by the superposition of many factors, including external fluctuations such as the conflict between Russia and Ukraine and the Fed’s interest rate hike. After this wave of adjustment, the market risk has been greatly released.
bottom signal display
Analysts believe that the current market has obvious bottom characteristics, and the continuous contraction is also a big bottom signal.
Data show that since March 22, the turnover of A-Shares has been less than 1 trillion yuan for five consecutive trading days, and the turnover on March 28 was 870796 billion yuan.
According to China International Capital Corporation Limited(601995) analysis, the range and duration of previous periodic bottom adjustment are irregular, and the duration of the bottom area is quite different, which may lead to the shift of market adjustment factors or expected improvement. Important market bottom signals include fundamental signals, policy signals, valuation signals, capital signals and behavior signals.
“At present, the market valuation is close to the historical low, which may have released more risks, and the capital signal and behavior signal need to be observed.” China International Capital Corporation Limited(601995) strategy analyst Li qiusuo thinks.
China Industrial Securities Co.Ltd(601377) chief strategist Zhang Qiyao said that on the one hand, with the significant release of the fear of conflict between Russia and Ukraine and the landing of the “boots” of the Federal Reserve’s interest rate hike in March, the peak of investors’ risk aversion has passed. On the other hand, the senior management has made a clear deployment to “suit the remedy to the case” for the A-share fluctuations and other issues concerned by the market.
long view of scenery
In the case of multiple bottoming signals and obvious bottom characteristics in the A-share market, institutional people believe that it is not suitable to be pessimistic about the current market, and the market opportunities outweigh the risks.
China International Capital Corporation Limited(601995) chief strategist Wang Hanfeng believes that the short-term market may still be repeated, but the more targeted “steady growth” policy may also gradually bring about the improvement of fundamental expectations. The stage similar to the sharp decline in the previous period may have ended, and the market may still be in the “bottom grinding” stage in the short term. Recently, the market adjusted valuation has gradually approached the bottom level in December 2018 and March 2020.
Wang Hanfeng said that investors can focus on the following areas: infrastructure, real estate, stable demand, related industrial chains (building materials, construction, household appliances, home appliances, etc.), brokerage finance, etc; In 2021, the middle and lower reaches of the consumer sector with many adjustments, low valuation and clear medium and long-term prospects, including household appliances, light industry and household appliances, automobiles and parts, agriculture, forestry, animal husbandry and fishery, medicine, etc; Manufacturing growth sectors, including new energy vehicles, new energy and technology hardware semiconductors, have released risks.
Huaan Securities Co.Ltd(600909) chief strategist Zheng Xiaoxia said that it is appropriate to look at the quantity of scenery and change space with time. At present, A-Shares have fallen back to the level of undervalued value and have good medium and long-term investment performance price ratio. Optimistic about the market of the third stage of growth style, steady growth (new and old infrastructure, real estate and banks) and consumption recovery.
“A shares have returned to the normal driven by fundamentals from emotion, and a number of policy combinations are expected to be gradually launched to form a joint force. The economy will gradually repair in the second quarter, and A-Shares will gradually stabilize and enter the medium-term upward channel.” Said Qin Peijing, Citic Securities Company Limited(600030) chief strategist.
