Stock Market Plunges as A-shares Tumble, Thousands of Stocks Fall by Over 10%
On April 16, 2024, the A-shares market witnessed a significant downturn with more than 5,000 stocks plummeting. Over a thousand stocks hit their limit or fell by more than 10%, while less than 300 stocks experienced an increase in value. The Shanghai Stock Exchange Index closed at 3007.07 points, marking a 1.65% decrease, while the Shenzhen Component Index fell by 2.29% to 9155.07 points. The ChiNext Index also dropped by 1.97% to 1760.20 points.
The turnover of the Shanghai and Shenzhen stock markets totaled 947.2 billion, a decrease of 49.9 billion from the previous trading day. In addition, foreign capital represented by Northbound funds sold a total of 2.793 billion yuan, with 1.36 billion yuan sold on the Shanghai Stock Connect and 1.432 billion yuan sold on the Shenzhen Stock Connect.
The market saw Chinese-headed stocks performing well while most theme sectors experienced a sharp decline. Sectors such as ST stocks, low-priced stocks, shell resources, micro-cap stocks, and loss-making stocks were among those hit hardest. Micro-cap stocks with a market value of less than 1 billion yuan collectively fell by over 10%.
The recent issuance of “Several Opinions on Strengthening Supervision and Preventing Risks to Promote High-Quality Development of the Capital Market” by the State Council of the Communist Party of China has shifted focus towards white horse stocks, blue chip stocks, and high-dividend companies. Conversely, companies with weak fundamentals, repeated losses, and no dividends are at risk of being “abandoned” by the market.
Financial analysts and bloggers have expressed concerns about the ongoing market turmoil. Financial blogger “Uncle Bao” highlighted the challenges faced by small companies trying to go public and how stringent regulations could hinder their survival in the A-share market. Meanwhile, financial content creator “Smart Little Li” raised concerns about the indiscriminate plummeting of small- and mid-cap stocks, locking the upward channel for potential growth.
The market’s continuous decline has left many investors puzzled. Financial blogger “Value Ranch Wang Wei” commented on the lack of money in the market leading to the ongoing bearish trend and emphasized the importance of financial stability for a thriving market.
The sharp decline in A-shares has raised concerns among investors and market participants, emphasizing the need for careful analysis and strategic investment decisions in the current economic climate.