Shanghai Composite Index Narrowly Guards 3200 Points
On Monday (17th), the Shanghai Composite Index opened sharply lower and maintained a horizontal consolidation throughout the day. The index narrowly guarded the 3,200 points mark, ending the day down more than 1% at 3,209.63 points. The Shenzhen Component Index and the ChiNext also fell slightly less than 1%. Individual stocks saw more declines than gains, with approximately 3,000 stocks falling compared to just over 2,100 stocks rising.
Market turnover remained sluggish, with the turnover of A shares and the two markets reaching only 802.6 billion yuan. Northbound trading was suspended due to the closure of the Hong Kong stock market caused by a typhoon.
The weak performance of A shares was attributed to several factors by Guo Yiming, an analyst at Jufeng Investment Consulting. Firstly, the mid-term reports of many companies were lower than expected. Secondly, when the rising index broke through 3200 points, trading was poor, indicating low market enthusiasm and weak sustainability. Lastly, the macro data announced for the second quarter and the first half of the year was slightly lower than market expectations.
The National Bureau of Statistics of China released data that showed China’s gross domestic product (GDP) grew by 6.3% year-on-year in the second quarter, benefiting from the low base effect of Shanghai’s epidemic prevention control measures in the same period last year. However, this growth rate was still lower than the expected 7.3%. On a quarterly basis, growth slowed to 0.8% from 2.2%, which was slightly stronger than the forecast of 0.5%.
Pang Ming, Chief Economist of Jones Lang LaSalle in China, emphasized that while the economy has shown marginal improvement and a stable recovery, the external environment has become more complex and severe, posing a challenge to the continued recovery and development of the domestic economy. Fu Linghui, spokesperson of the National Bureau of Statistics, also echoed this sentiment, stating that the domestic economic development will face pressure in the next stage.
Despite the weak performance, CICC (China International Capital Corporation) maintains a relatively optimistic view on A shares. They believe that the current valuation of the A-share market is at a historically low level, with asset prices factoring in more cautious expectations. They highlight that some positive factors are accumulating and that opportunities outweigh risks in the market. CICC recommends paying attention to the impact of changes in the internal and external environment on the A-share market and making investment decisions based on marginal changes in policy expectations.
In conclusion, the Shanghai Composite Index narrowly defended the 3,200 points mark amid a downturn in the market. The weak performance was attributed to lower-than-expected mid-term reports, low market enthusiasm, and slightly lower macro data. As the external environment becomes more complex and severe, investors are advised to monitor policy changes and remain cautious in their outlook for A-shares.
[This article is from Yingwei Caiqing Investing.com, to read more, please log in to cn.investing.com or download Yingwei Caiqing App]
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Editor: Liu Chuan