A-shares get off to a good start and the Shanghai Index hits a new high for the year
China’s assets perform well in May and the market will be more stable and sustainable
Guangzhou Daily (All Media Reporter Lin Xiaoli) The “May Day” holiday has been a frequent benefit, which has helped the market. On May 6, the first trading day after the May Day holiday, the three major A-share indexes collectively strengthened, with the Shenzhen Component Index leading the gains, up more than 2%, to 9779.21 points; the Shanghai Composite Index rose 1.16% to 3140.72 points, hitting a record high An 8-month high; the ChiNext Index rose 1.98% to 1895.21 points. Capital trading was active, and the market exceeded 1 trillion yuan for the fourth consecutive trading day, reaching 1,102.5 billion yuan, an increase of 71.8 billion yuan from the previous trading day. Northbound funds entered the market aggressively to purchase goods, with net purchases of 9.316 billion yuan throughout the day, and net purchases of more than 10 billion yuan at one point during the session.
It is worth noting that in addition to A shares, Hong Kong stocks also continued to rise. On that day, the Hang Seng Index closed up 0.55%, achieving ten consecutive gains, setting a record for the longest consecutive rise since 2018; the Hang Seng Technology Index rose 0.92%, closing at 4,007 points, reaching the 4,000-point mark for the first time this year.
More than 4,500 stocks are in the red, Chinese assets perform brilliantly
Stocks in the two cities showed a trend of rising more than falling, with more than 4,500 stocks going red. On the market, the chemical sector broke out, with more than 20 stocks such as United Chemical, Baolidi, Qicai Chemical, and Chuanheng Co., Ltd. reaching their daily limit. The concept of synthetic biology continues to gain strength, with the home furnishing, home appliances, food and beverage, pharmaceutical, and brewing sectors leading the gains. It is worth mentioning that Kweichow Moutai rose by more than 3%, with a turnover of more than 10 billion yuan and a total market value of 2.2 trillion yuan, surpassing China Mobile and establishing itself as the “biggest brother” of A-shares.
A-shares rose on the first day after the holiday, in line with market expectations. This was a round of market driven by funds, especially driven by long Chinese assets. Looking back at the global capital market during the May Day holiday, Chinese assets performed brilliantly. From May 1st to 3rd, the Nasdaq China Golden Dragon Index gained three consecutive gains, with a cumulative increase of more than 8%; the sharp rise in Hong Kong stocks was even more eye-catching. As of May 6th, the Hang Seng Index had achieved ten consecutive gains, the highest in 2018. The longest streak of gains since the beginning of the year.
A-share trend: The market will be more stable and sustainable in May
Regarding the follow-up trend of A-shares, CITIC Securities released a research report stating that in May, with the end of the financial reporting season, expectations for a U.S. dollar interest rate cut are clear, domestic reform expectations have begun to strengthen, global funds have a strong willingness to allocate Chinese assets, and market risk appetite is significant With the improvement, the market game will tend to ease. It is expected that the A-share market will be more stable and sustainable in May under the three pillars of excellent growth, active themes, and dividend varieties.
Guotai Junan also believes that looking forward to the market outlook, the reduction in uncertainty from the economy, policy, and stock market is expected to promote investors’ improvement in risk acceptance, expected restoration, and position replenishment. Investment opportunities will be in the middle of the year, and A-shares are expected to fluctuate and rise.
In terms of allocation, Guotai Junan said that the market trend comes from declining uncertainty rather than an upward revision of profit expectations, so the investment focus in mid-year is on stocks with growth potential. Specifically, investment opportunities lie in technological manufacturing and materials and consumption with growth potential. Everbright Securities said that comprehensively, industries such as household appliances, petroleum and petrochemicals, non-ferrous metals, food and beverages, pharmaceuticals, and biology are the most worthy of attention. (Guangzhou Daily)