A-shares fell below 2,600 US dollars, causing global capital markets to suffer

Abstract US stocks have caused trouble, and global capital markets have suffered. Affected by the sharp decline in the US stock market, the Asia-Pacific stock market plummeted yesterday. The Nikkei index fell more than 3% throughout the day, and the A-share Shanghai Composite Index fell below the 2,600-point mark. The Korean stock market and the Singapore stock market both fell more than 2%. ...

US stocks have caused trouble, and global capital markets have suffered. Affected by the sharp decline in the US stock market, the Asia-Pacific stock market plummeted yesterday. The Nikkei index fell more than 3% throughout the day, and the A-share Shanghai Composite Index fell below the 2,600-point mark. The Korean stock market and the Singapore stock market both fell more than 2%.

US stock market value has shrunk by more than 1.2 trillion US dollars a day

The "black day" is so raging. US stocks plunged on Wednesday! The Dow Jones Industrial Average fell more than 800 points, the biggest drop in the past eight months; the Nasdaq index fell 4.08%, the biggest one-day drop since June 24, 2016; the S&P 500 fell for five days , set the longest losing streak since Trump was elected president.

According to analysts' rough estimates, on Wednesday, the US stock market shrank by more than 1.2 trillion US dollars, equivalent to more than 8 trillion yuan. Market capitalizations such as Amazon, Apple, Microsoft, Google, Berkshire Hathaway, Alibaba, Facebook, VISA, MasterCard, Netflix, NVIDIA, Boeing, and JP Morgan Chase have all shrunk by more than $10 billion. This is the most bleak day for US stocks in recent months.

The global stock market has suffered

US stocks plummeted, and global stock markets naturally suffered.

At the close, the European STOXX 50 index closed down about 1.66%; the UK FTSE 100 index closed down 1.71%; the French CAC40 index closed down 1.35%; the German DAX index closed down 1.12%. The Dow Jones Industrial Average closed down 3.15%; the S&P 500 closed down 3.29%; the Nasdaq Composite closed down 4.08%.

Yesterday morning, the Asia-Pacific stock market also followed the plunge. The Nikkei index fell nearly 500 points on the opening, falling more than 2%. At the close, the Nikkei closed at 22,590.86 points, down 915.18 points, or 3.89%. The same is true for the Korea Composite Index, which fell 98.94 points, down 4.44%, hitting its lowest level since November 2017. Hong Kong's Hang Seng Index fell 926.7 points to close at 25,266.37 points, a drop of 3.54%.

A shares were not spared

A shares have not been spared. The Shanghai and Shenzhen stock indexes both opened lower yesterday morning, and the Shanghai Composite Index broke through the previous "melting bottom" 2638 points shortly after the opening. Subsequently, the Shanghai Composite Index fluctuated within a narrow range, but the intraday shorts continued to exert strength, and the two stock indexes further declined. In the afternoon, the Shanghai Composite Index fell below 2,600 points, the deepest decline in the session was over 6%, and the Shenzhen Component Index and the GEM index fell more than 6%, continuing the new low in four years.

At the close, the Shanghai Composite Index reported 2,584.46 points, down 142.38 points, or 5.22%; the Shenzhen Component Index was 7504.09 points, down 486.6 points, or 6.07%; the GEM pointed to 1261.88 points, down 84.82 points, or 6.30%. More than 1,800 stocks in the two cities fell more than 9%, and thousands of stocks fell.

Long-term allocation of funds ushered in comfort

However, for institutional investors, the downside is another opportunity to buy.

Yesterday, Credit Suisse Group released a report that China's stock market is expected to rebound technically. The magnitude and length of this round of declines are comparable to those of 2011 and 2015. At that time, the rebound was closely followed. Credit Suisse said that the downside risks to China's stock market valuation are very limited, and the catalyst factors worthy of attention in November include China's possibility of announcing reform policies during the annual economic conference.

Shen Wan Hongyuan’s strategy report also believes that long-term allocation of funds is relatively comfortable in the face of such a market. The rapid correction of the market provides better configuration opportunities, but the short-term operation of tactical funds is still more difficult. In terms of structure selection, the problem of insufficient core price of foreign-funded core assets and high dividend-paying sectors is rapidly being revised. After the callback, it is still a mid- and long-term allocation. The short-term oil and gas industry chain and insurance are relatively certain directions for relative returns. The stocks that exceed the expectations in the third quarter will be the focus of the next stage.

More and more good investment targets

Public funds are also collectively contributing to A-shares. The Macro Strategy Department of Bosera Fund said that, contrary to the global stock market turmoil in February, the reason for the sharp adjustment of US stocks was mainly due to the rapid rise of US bond yields to a key level of around 3.3%. The interest rate after the interest rate exceeded the level. Will be more obvious. The A-share market was mainly affected by the sentiment of the US stock market plunging, and the structural technology stocks fell more than the blue-chip stocks. However, after the sharp decline, the short-term further decline of A-shares is small, and the global stock market is also difficult to continue to stage the crisis mode. Following the stabilization of US stocks, A-shares may be expected to break out.

Haifutong Fund also believes that the adjustment of the A-share market is the result of a combination of factors. Looking ahead to the market, whether it is a historical vertical comparison of the A-share market itself or horizontal comparison with other major global markets, the investment value of A-shares is constantly emerging. The process of market adjustment is the process of continuous release of risks. What institutional investors see is that there are more and more investment targets with good risk-to-reward ratios.

Morgan Stanley Huaxin Fund believes that the US stocks are superimposed on the monetary tightening, and the risks begin to be exposed. Whether in terms of absolute valuation or relative valuation, US stocks are currently at historically high levels, and the hidden risks behind them are the basis of this downswing. The A-shares have already begun to adjust before the US stocks, and are currently in the bottom of history. The continuous decline of the previous A-shares has released most of the risks, so maintain a cautiously optimistic view of the market trend, the configuration is mainly based on relatively stable industries or sub-sectors such as counter-cyclical and low valuation.

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