A-share Market Recovers Following Sudden Change in A50
The A-share market has made a strong recovery this afternoon after a sudden change in A50 yesterday. The GEM small-cap index rose sharply, with the GEM index also seeing a 2% rise. Additionally, the Science and Technology Innovation Board and the CSI 1000 Index rebounded sharply. Foreign investors entered the market in the afternoon, with net buying reaching 7 billion yuan at one point.
The sudden shift in the market has been attributed to two main factors. First, there is news that the call option holdings of iShare China ETF (FXI) have significantly increased in recent weeks. Second, there are rumors of expectations for a rate cut next week, with strong indications coming from the Hong Kong stock market.
The A-share market saw a significant rebound in the afternoon, with individual stocks performing well and fewer than 700 stocks falling in the two cities. Stocks that have been previously dormant, such as CATL, saw strong performance, and the lithium mining sector continued its offensive. The A50 index also rose sharply this afternoon, leading to optimism in the market.
Hong Kong stocks also continued to rise this afternoon, with the Hang Seng Index and the Hang Seng Technology Index both seeing gains. This suggests that foreign capital may be a driving force in the bull market today.
The market’s sharp rise this afternoon is also tied to expectations of interest rate cuts, with news of a potential rate cut circulating midday. Additionally, there are strong indications from the bond market reflecting expectations of interest rate cuts.
Looking ahead, there is increasing speculation about the probability of an interest rate cut and an RRR cut in January. Major state-owned banks have already lowered deposit interest rates, indicating potential further reductions. There is also optimism for potential returns in the Hong Kong stock market in 2024 and beyond.
It is important to note that these developments are based on speculation and rumors. Investors should carefully consider their investment decisions and conduct thorough research before making any decisions.
(Note: The source of this article is Brokerage China. It should be noted that the article does not constitute investment advice, and individuals should invest at their own risk.)