A-Share Market Reclaims 3000-Point Threshold

• 2024-08-08
• News

A-shares Reclaim 3,000 Points

Today, A-shares started low and ended high, with the Shanghai Composite Index rising by more than 3% in the afternoon, regaining the 3,000-point psychological level. The Shenzhen Component Index and the ChiNext Index both rose by over 4%. By the close, the Shanghai Composite Index had increased by 3.61%, the Shenzhen Component Index by 4.44%, and the ChiNext Index by 4.42%.

A total of 5,143 stocks rose across the market, with 151 stocks hitting their upper limit, while only 177 stocks fell. Market transactions remained active, with the total transaction volume on both exchanges surpassing 1.1 trillion yuan for two consecutive days.

Baijiu stocks experienced a comprehensive surge, with multiple stocks such as Wuliangye and Laobaigan hitting their upper limit, and Kweichow Moutai rising by more than 9%.

Real estate stocks triggered a wave of upper limits, with more than 40 stocks including Vanke A, China Merchants Shekou, Poly Development, Gemdale Corporation, and Seazen Holdings hitting their upper limit.

Food stocks fluctuated and rebounded, with stocks such as Qianwei Central Kitchen, Juewei Food, and Guangzhou Restaurant hitting their upper limit!

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In terms of Hong Kong stocks, the Hang Seng Index surged by nearly 4%, and the Hang Seng Technology Index once surged by more than 7%.

Major News

In terms of news, a meeting held on September 26 mentioned that it is necessary to view the current economic situation comprehensively, objectively, and calmly, face difficulties, and strengthen confidence to effectively enhance the sense of responsibility and urgency in economic work. It is essential to focus on key points, take the initiative, effectively implement existing policies, and introduce additional policies to further improve the targeted and effective nature of policy measures, striving to complete the annual goals and tasks for economic and social development.

The meeting emphasized the need to increase the counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively carry out grassroots "three guarantees" work. It is necessary to issue and use ultra-long-term special treasury bonds and local government special bonds well, better leveraging the driving effect of government investment. It is also important to lower the reserve requirement ratio and implement a strong interest rate cut. Efforts should be made to stabilize the real estate market, strictly control the increase in commercial housing construction, optimize the existing stock, and improve quality. The intensity of loan distribution for "white list" projects should be increased to support the revitalization of idle land. It is necessary to respond to public concerns, adjust housing purchase restrictions, reduce the interest rates of existing mortgages, and promptly improve policies in land, finance, and finance to promote the construction of a new model for real estate development. Efforts should be made to boost the capital market, vigorously guide medium and long-term funds into the market, and unblock the entry points for funds from social security, insurance, and wealth management. Support should be provided for mergers and acquisitions of listed companies, steadily advance the reform of public funds, and study and introduce policy measures to protect small and medium investors.CITIC Securities' Chief Strategy Analyst, Chen Guo, stated that today's meeting sent a very strong signal of fully revitalizing the economy, and it also specifically mentioned the effort to boost the capital market, which is inspiring and constitutes a double benefit of profits and valuation for the stock market. It is expected that the trends of A-shares and Hong Kong stocks will both reach a higher level, maintaining the judgment that the main indices of the A-share market are expected to challenge the intra-year highs in May.

CICC pointed out that the meeting further released a signal of policy intensification, and the upward trend of A-shares is expected to continue!

The meeting pointed out that "the current economic operation has encountered some new situations and problems," and emphasized the need to "comprehensively, objectively, and calmly view the current economic situation, face difficulties, strengthen confidence, and effectively enhance the sense of responsibility and urgency in doing economic work." Compared to the Politburo meeting held at the end of July, the description and response to economic issues in this meeting, particularly the "sense of urgency," have been significantly strengthened. In terms of response, it was proposed to "act proactively, effectively implement existing policies, and introduce additional policies with increased effort," and once again emphasized the need to "strive to complete the annual economic and social development goals and tasks." In terms of policy deployment, the stance has also been strengthened compared to previous meetings, especially regarding fiscal policy, which has been a focus of the market after the National New Conference, emphasizing "to increase the counter-cyclical adjustment strength of fiscal and monetary policies, and ensure necessary fiscal expenditures."

The real estate sector emphasized the need to promote "stabilization after a decline." The real estate field directly addressed market concerns, emphasizing "to strictly control the increase in commercial housing construction, optimize the existing stock, and improve quality, increase the loan allocation for white list projects, and support the revitalization of idle land." It also mentioned "adjusting housing purchase restrictions and reducing the interest rates on existing mortgages."

In terms of the capital market, a clear "stabilize the market" signal was released. The Central Politburo meeting at the end of July emphasized the capital market by stating "to coordinate risk prevention, strengthen regulation, and promote development, boost investor confidence, and enhance the inherent stability of the capital market." The content related to the capital market in this news release has significantly increased, emphasizing "to strive to boost the capital market, vigorously guide medium and long-term funds into the market, and unblock the points of entry for social security, insurance, and wealth management funds. Support mergers and acquisitions of listed companies, steadily advance the reform of public funds, and study the introduction of policies and measures to protect small and medium investors." In conjunction with the market environment since the third quarter, this meeting reflects a high level of attention to the capital market.

The news release also made requirements and deployments on issues of concern to the market, such as the development of private enterprises, emerging consumption, population structure, opening up to the outside world, and employment.

The meeting further released a signal of policy intensification, and the upward trend of A-shares is expected to continue. On the one hand, the timing of this Central Politburo meeting has attracted market attention, and on the other hand, combined with the previous National New Conference, it has made a clearer stance on policy responses, especially fiscal policy, which investors are more concerned about, and has given high attention to the capital market. We believe that this meeting has a positive impact on the market and is expected to further promote the stabilization of investor confidence. Under the current environment, the upward trend of the A-share market is expected to continue.