CITIC construction investment and CITIC Securities plummeted in the afternoon, driving down sentiment in the market. As of the end of the day, China CITIC construction investment fell 7%, CITIC Securities fell 5.72%, and the overall decline of securities companies was more than 3%. So, what is the reason that led to the early trading also slightly strong Chinese Shenju down? A source from the South China Morning Post said that Wall Street trading companies would be allowed to have exclusive brokerage business in China. The market may think that this news may impact on the brokerage industry, which accounts for the majority of brokerage business.
However, judging from the global market atmosphere, it can be described as a big fire. Europe rose sharply, with the Hang Seng index rising more than 2% and Haidilao soaring by nearly 13%. Analysts believe that the phenomenon that A-shares have not kept pace with the outside world recently is largely due to the excessive structural growth of the market, and the index has been kidnapped by these stocks, such as medicine for the gem index and brokers for the general index. The second half of the year is often a cashing period, so the market reflects that the chips are not convergent enough, and intermittent falls are more frequent. In fact, this kind of market is also quite abusive to investors, and the market needs to be precipitated.
The killing and falling caused by securities companies
As of todays closing, the Shanghai Composite Index fell 1.15% to 3340.29 points; the Shenzhen composite index fell 1.4% to 13466.27 points; the gem index fell 1.7% to 2688.7 points; and the science and technology innovation 50 fell 2.85%.
From the overall market trend, the market trend is relatively stable for most of the day. But after two points, the market suddenly dived, and the main cause of the dive was the securities companies. At 2:04 p.m., China Construction Investment (CSCI), which had been continuously forced to turn around, fell sharply, closing down more than 7%. CITIC Securities also showed a similar trend. The leading characters of the two major merger scandals lost their vitality, and other securities companies stocks were even more vulnerable, and they followed suit one after another. As of the end of the day, the whole securities business sector fell by 3.38%.
So, what is the reason that leads to the decline of securities companies? According to the South China Morning Post, Wall Street trading companies will be allowed to have exclusive brokerage and fund management business in China. In June, China allowed Wall Street investment bank JPMorgan Chase to operate its first fully foreign-owned futures business on the mainland. American Express joint ventures network clearing license was approved, making it the first foreign credit card company to conduct domestic business in China. The opening up of the financial industry to foreign investment has become a trend. In this context, the market may worry about the impact on domestic securities companies. After all, for most brokers, brokerage accounts for a very high proportion of profits.
The problem is that the stock market sentiment is biased. On the disk, the technology stocks all callback, operating system, radio and television system, digital currency, UHV, financial technology and other indexes fell sharply. Haiqi group, Guangqi technology, inter group, Junzheng group and a number of high-level shares fell sharply. Gold stocks significantly callback, Chifeng gold limit, humon shares, Shengda resources fell. In addition, the recent relatively strong Shenzhen local stocks have also seen a collective sharp decline. As long as its a crowded place, theres stampede.
Everything has cause and effect. If it wasnt for the protection of Chinas Shenzheng securities in recent trading days, todays A-shares might not have fallen against the global trend. Lets first look at what the global market is like.
First, Hong Kong stocks. Hong Kong stocks opened high within the day, and was once weak by a shares in the afternoon. But after the A shares closed, the Hang Seng Index rose again, rising 2.11% to 24890.68. The key is that the Hang Seng SOE index also rose 1.63%, while the Hang Seng technology index fell 0.65%. On the disk, gambling, catering, photovoltaic concepts rose, technology stocks relatively weak. In terms of gaming stocks, sands China rose 9.8%, led by blue chips, Wynn Macau rose 6.5%, Melco international development rose 5.5%, and SJM holdings rose 5.1%. On the news, Zhuhai travel endorsement to Australia will be open on the 12th. Photovoltaic concept rose sharply, GCL new energy increased by 24.8%, poly GCL energy increased by 10.5%. The most noteworthy is the catering stocks, Haidilao closed up nearly 13% and its market value reached above HK $220 billion. In addition, Sipu and Sipu rose by 6.5%, and Yihai international rose by 4.5%.
Zheshang securities recently released a research report that the loss forecast and negative impact of food safety of catering stocks in the first half of the year have been reflected in the stock price; high quality chain leaders seize the opportunity of shop clearance under the health event and accelerate the opening of stores, among which Haidilao third and fourth tier stores are sinking beyond expectations.
In addition, with the situation in Hong Kong gradually stable, local blue chip stocks have also recovered. Jiulongcang rose 5.66%; Hang Lung real estate rose 3.22%; HSBC Holdings, Changhe, Xinhe and real estate all performed well.
European stock markets are also well built across the board. As of press time, the main European stock indexes were up close to or more than 2%.
At the same time, the U.S. stock market early index trend is also very strong.
More noteworthy is the net purchase of nearly 4 billion yuan from northward funds. This means that the external disturbance to the A-share market may not be large. After the closing, the peoples Bank of China released financial data for July, which showed that Chinas social financing scale increased by 1.69 trillion yuan in July, estimated to be 1.85 trillion yuan, and the previous value was 3.43 trillion yuan. Chinas M2 money supply in July was 10.7% year-on-year, with an expected 11.2% and the previous value of 11.1%. China added 992.7 billion yuan of RMB loans in July, which is estimated to be 120 billion yuan, compared with 1811 billion yuan before. Data all lower than expected, in this case, the A50 did not reappear, but a weak rebound.
The current problem of a shares may still be structural. We can see that the A-share market has not been short of money recently. As of today, it has been trading more than trillion yuan for 10 consecutive days. But the characteristics of the market jumping up and down is very obvious, the overall performance of the market is that the chips are not convergent enough, and the intermittent killing and falling are more frequent. Analysts believe that the structural rise of the market is too large, and the index is also kidnapped by these stocks, such as medicine for the gem index, securities companies for the market composite index. The second half of the year is often a relatively easy time to cash in. This kind of market is also quite abusive to investors, and the market needs to be precipitated. It may be a good strategy not to pursue high and hot spots, but to collect high-quality chips when adjusting. Source: Securities Companies in China Author: Shi Qian, editor in charge: Zhong Qiming_ NF5619