Today’s Insights

Market Strategy

Stock indexes rushed back to adjust the highs, and the low popularity fell into the freeze

Monday, Shanghai and Shenzhen stock index to continue the weak shock adjustment trend, the whole day after the stock index opened low rapid rush high then again showed a gradual shock fall trend, the whole day energy storage and scenery track stock performance slightly active, the GEM index by Contemporary Amperex Technology Co.Limited(300750) impact of the whole day red significantly stronger than several other indices, Shanghai and Shenzhen multiple indices again hit a new low in recent months, including the Shanghai 50 index is a new low of 2.5 years, the market popularity into Freezing point. Plate hotspots continue to diverge, including hotel tourism, photovoltaic equipment and electricity storage sector performance slightly active up in front, oil extraction, precious metals and coal cycle sector overall adjustment, the individual shares fell more up less. Eventually the Shanghai and Shenzhen markets closed slightly down, the volume of 0.66 trillion slightly increased throughout the day, the market continues to trade in a sluggish state.

Caixin news agency, in order to stabilize foreign exchange market expectations and strengthen macro-prudential management, it was decided to increase the foreign exchange risk reserve rate for forward exchange sales business from 0 to 20% from September 28, 2022. The move will effectively improve the cost of forward foreign exchange sales by banks, reduce the demand for forward foreign exchange purchases by enterprises, and thus reduce the demand for foreign exchange purchases in the spot market, which will help the balance of supply and demand in the foreign exchange market, and more crucially, to ease the expectations of depreciation of the RMB exchange rate, affected by the news, the stock index once before the market an hour of rapid recovery trend, but due to the limited willingness of the market to follow, the new shares frequently break the trend, the stock index finally no success and down again.

Russia issued partial mobilization orders, Russia-Ukraine geopolitical tensions into a new phase, the future conflict may have escalated and long-term transformation trend, the EU continued to further increase sanctions against Russia, although COVID-19 Omicron variant strains added to reduce, but the global geopolitical conflicts continue to appear in many places, the global situation is turbulent part of the industrial chain and even collapse conditions, and thus the capital market has produced a great The impact of the shock shock intensified; the Federal Reserve raised interest rates by 75 basis points after the dollar continued to strengthen non-U.S. currencies to accelerate depreciation, the central banks in Europe and the United States during the year is still expected to continue to raise interest rates sharply because of high inflation, the central banks in Europe and the United States to resist inflation sharply raise interest rates to contract liquidity, the global monetary tightening cycle is established, and Europe and the United States aggressive rate hike policy is bound to lead to an increase in the probability of future global recession, so investors’ risk appetite tends to decline. With the US dollar index reaching a new high of more than 20 years, international crude oil prices fluctuating sharply and triggering an increase in the amplitude of commodity raw material prices, the world economic situation tends to be grim and complex, and investors’ worries about future economic stagnation and high inflation intensify. Although the management actively encourages and guides medium and long-term funds to enter the market, compared with the massive and continuous release of funds in overseas markets in the past few years, the prudent policy of the Chinese market is difficult to The A-share market has always been in a state of obvious imbalance between supply and demand, and the market lacks effective incremental funds basically based on the stock of funds, so the market is still more of a sector rotating structural market.

From the technical analysis, since July, several major stock indexes are subject to the annual line counter-pressure shock fall, the stock index since May began a round of retaliatory rebound trend basically announced the end. Last week, the stock index weak shock fall, Shanghai and Shenzhen several major indices have hit a new low in recent months, while the volume also continued to shrink iterations of the year inland volume level, indicating that investor confidence lost the market is extremely depressed. On Monday, the stock index continued weak shock adjustment, individual stocks fell more up less sector hot spots up and down in a disorderly manner, the market popularity into the freezing point; the current stock index stick to the 5 antenna shock down, the average line system has always shown a short arrangement, but in view of the time index deviation rate gradually large, the stock index in a continuous ground volume does not exclude the technical rebound at any time, so it is expected that the stock index wide range of shock is difficult to avoid, pay close attention to the GEM and science and technology innovation board The stock index is expected to fluctuate in a wide range, so pay close attention to the movement of the GEM and the science and technology innovation board.

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