Finally rebounded!
On January 26, the Shanghai stock index closed up 0.66% and the gem index rose 0.99%. The wind power, UHV and photovoltaic sectors rebounded strongly, and the brokerage sector rose in the afternoon to save the market. Northbound funds bought a net 1.139 billion yuan throughout the day and nearly 3 billion yuan in the afternoon; Among them, the Shanghai Stock connect net sold 161 million yuan and the Shenzhen Stock connect net bought 1.301 billion yuan. A total of 3088 stocks rose in the two cities, reversing the trend of falling across the board yesterday.
What is worth mentioning most is that Reuters, a well-known overseas media, suddenly became crazy about China’s stock market. Today, in an important position on its official website, it published a manuscript entitled “investors seek China’s safe haven at a time when the Federal Reserve and inflation plague other markets”. The article suggests that in early 2022, foreign investors poured into China as a safe haven from the inflation, growth and pandemic problems that plagued most other markets. Some well-known institutions even said that China is the “favorite country” among about 30 investable emerging markets in 2022.
from the whole disk, the cro and pharmaceutical sectors of A-Shares and Hong Kong shares fell sharply. A source disclosed that a brokerage held a teleconference today, in which an expert released bad information, which then triggered a sharp decline in the future. It can only be said that the mentality of investors is still relatively fragile.
crazy fans from Reuters
Today, an article entitled “investors seeking China’s safe haven at a time when the Fed and inflation are troubling other markets” was published in an important position on Reuters’s official website. This article is as conspicuous as Reuters headlines.
The article suggests that in early 2022, foreign investors poured into China as a safe haven from the inflation, growth and pandemic problems that plagued most other markets.
Despite the erosion of regulatory and policy policies last year, global fund managers are still pouring money into Chinese mainland stocks and bonds, betting that China’s stability commitments, monetary and fiscal easing policies and low inflation may protect them from other market fluctuations.
At the end of last year and the beginning of this year, the world’s major central banks were preparing to withdraw the excessive stimulus measures of the past few years, and the Federal Reserve was accelerating the tightening of monetary policy to curb runaway inflation, which could damage stock value and earnings.
For David Dali, head of portfolio strategy at Matthews Asia, China is the “favorite country” of about 30 investable emerging stock markets in 2022. “We believe that China’s valuation is the least risky and most attractive of all major markets.”
He cited a number of factors, including less regulatory resistance, the government’s readiness to stimulate the economy, and the statement of stability within a year.
Fidelity International also believes that Chinese stocks are attractive from a global perspective. “China’s policy shift is very clear, and recent data provide signs that the economy has stabilized.” Zhou wenqun, fund manager of fidelity in Shanghai, said.
According to Morgan Stanley, the net inflow of foreign capital into Chinese stocks through the land stock connect plan is bullish evidence. The plan reached a record daily average of $413 million in the first three weeks of 2022.
In 2021, the capital flow was strong, and the capital invested in onshore stocks through connect channel reached a record $67 billion. However, the mainland blue chip index fell 5.2%, while the US Standard & Poor’s 500 index rose nearly 27%, and most European indexes recorded double-digit gains.
In the context of the widening differences between China and the United States on monetary policy, bond investors are also attracted by China. The bond market usually performs poorly in the interest rate increase cycle, but in China, “we see that the monetary policy easing cycle has just begun.” Paula Chan, senior portfolio manager at Manulife investment management, said more interest rate cuts were expected. China’s “inflation concerns are not as worrying as other countries”, and its bonds are a good hedging tool. Strong foreign capital inflows have pushed the yuan to its highest level against the US dollar in nearly four years.
In contrast, the Institute of International Finance (IIF) said that foreign capital inflows to emerging markets, with the exception of China, had “suddenly stopped”. In December last year, emerging markets (EM) outside China outflow $9.6 billion, while China inflow $10.1 billion. China’s stock market inflows amounted to US $12.5 billion (nearly 80 billion yuan), accounting for most of the capital inflows from emerging markets.
For non Chinese emerging markets, “we believe the outlook is worsened by Omicron variables and expectations of a stronger US dollar and rising US interest rates,” IIF said in its latest capital flow tracking report. “The market believes that China’s rebound is faster than other emerging markets.”
Morgan Stanley said that at the beginning of this year, foreign purchases were concentrated in the fields of banking, materials and capital goods, among which the top stocks include China Merchants Bank Co.Ltd(600036) , Nari Technology Co.Ltd(600406) and Ping An Insurance (Group) Company Of China Ltd(601318) . UBS Securities said that both foreign investors and Chinese mutual funds allocated funds to what they considered hot topics, such as new energy and manufacturing.
a conference call attracted Black Swan
In fact, today is a relatively good trading day. Growth stocks and blue chips are sought after by funds. On the disk, wind power and UHV were strong throughout the day, Dajin Heavy Industry Co.Ltd(002487) , Jiangsu Zhongtian Technology Co.Ltd(600522) and other trading limits, Nari Technology Co.Ltd(600406) , Trina Solar Co.Ltd(688599) followed up. In the afternoon, the brokerage sector pulled up to protect the market, and the photovoltaic, semiconductor, electric power and cement sectors were built. The Chinese prefix was led by China Oilfield Services Limited(601808) , Aluminum Corporation Of China Limited(601600) , China Railway Group Limited(601390) .
However, there is an obvious decline in one sector, that is, cro and pharmaceutical sectors, Wuxi Apptec Co.Ltd(603259) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Pharmaron Beijing Co.Ltd(300759) fell in large quantities.
The Hong Kong stock market has also seen a decline across the board. Shunteng International Holdings, Wuxi Apptec Co.Ltd(603259) , Hangzhou Tigermed Consulting Co.Ltd(300347) and others plunged one after another.
According to sources, a brokerage held a teleconference today, in which an expert released bad information, which later triggered a sharp decline. However, the source was unwilling to disclose what the specific experts said and which brokerage held the telephone meeting.
Since January this year, the A-share market has been relatively fragile and greatly affected by the periphery. Industry experts believe that these will not interfere with the fundamental expectations of a shares. In the medium and long term, the trend of China’s stable and good economy has not changed, the macro policy is stable and positive, the capital is expected to remain abundant, the reform of the capital market continues to promote, and the capital market is expected to achieve steady progress. Of course, the current market sentiment still has a repair process. Although it rebounded today, the contraction is very strong, and the transaction volume is less than 800 billion yuan throughout the day. This means that investors’ wait-and-see mood is still very deep. Historically, when the Spring Festival holiday is coming, most of the markets are doing the same, but there may be more variables this year.
