(Economic Observation) Can Global Stocks Meet "Black Monday" Can A-Shares Get Out of Independent Market?
China News Agency, Beijing, March 10th (Reporter Chen Kangliang) Global stock markets have encountered "Black Monday" this week. Among them, the US stock market, the world's leading stock market, fell 7% on Monday, rarely triggering a fusing mechanism. Other major stock markets, including China's A shares, also suffered severe setbacks, causing widespread concern.
On Monday, the U.S. stock market suffered a sharp selloff. The S & P 500 index fell 7% quickly, triggering the first fuse mechanism, and US stocks were suspended for 15 minutes.
The so-called fuse mechanism is simply that when the stock market falls to a certain extent, the market automatically stops trading for a period of time, which may be a few minutes, or it may be terminated throughout the day. The main purpose of this is to prevent the panic mood from further aggravating and bring greater impact to the market.
According to the US stock market fusing rules, in general, when the S & P 500 index falls by 7%, the first level of fusing will be triggered, and the city will suspend trading for 15 minutes; if the decline increases to 13%, the second level of fusing will be triggered, and the market will be suspended for another 15 minutes. ; If the decline increases to 20%, trading will be suspended until the next trading day.
On the same day, US stocks did not trigger a second-stage fusing. After the resumption of trading, the three major US stock indexes basically fluctuated at a low level, and finally fell sharply. Among them, the Dow Jones Index fell 7.79%, the S & P 500 Index fell 7.6%, and the Nasdaq Composite Index fell 7.29%.
In addition to the sharp fall in U.S. stocks, other major stock markets around the world also suffered sharp declines. In terms of European stock markets, the British FTSE 100 index fell more than 7%, the French CAC40 index fell more than 8%, and the German DAX index fell nearly 8%. In the Asian stock market, China's Shanghai Composite Index fell more than 3% and China's Hong Kong Hang Seng Index fell more than 4% The Nikkei 225 Index closed down more than 5%, the Korea Composite Index fell more than 4%, and major stock indexes in Singapore, India, Indonesia, the Philippines, and Vietnam all fell more than 5%.
In this regard, Galaxy Securities analyst Xu Dongshi said that the sharp drop in global stock markets on Monday was mainly due to the dual pressure caused by the spread of the new crown pneumonia epidemic and the plunge in oil prices. Especially considering that the epidemic has already impacted world economic growth, and the decline in crude oil prices will bring deflationary risks to the world, which has exacerbated investor panic.
Recently, due to the failure of the Organization of Petroleum Exporting Countries and non-OPEC oil producing countries headed by Russia to agree on crude oil production policies after the end of March this year, international oil prices have fallen in a panic. As of the close of March 6, the price of light crude oil futures for April delivery on the New York Mercantile Exchange fell more than 10%, and the price of London Brent crude for May delivery fell more than 9%.
Affected by the plunge in crude oil prices, U.S. Treasury yields also fell significantly. Yang Delong, chief economist of Qianhai Open Source Fund, told a reporter from China News Agency that the sharp decline in the yield on U.S. Treasuries represents an extreme reduction in investor risk appetite and the pursuit of fixed-income products such as bonds, which has once again put pressure on U.S. stocks. In fact, after a 10-year bull market, the valuation of US stocks has been at historically high levels, pressure on profit-taking is very high, and factors such as the diminishing margin of the effect of the Trump administration's tax cuts can be said. Conditions have been met, and the probability of US stocks peaking has become higher and higher.
In view of the future trend of A-shares, many analysts believe that short-term A-shares are difficult to stand alone, but in the long-term, it is expected to get out of the independent market.
Hong Liang, an analyst at Galaxy Securities, believes that there will be some adjustment pressure on A shares in the short term, but the downside is expected to be limited. Taking into account that the current policy tone of China's official steady growth has not changed, the loose liquid market environment and counter-cyclical control policies will continue; In addition, as China's new crown pneumonia epidemic is gradually effectively controlled, enterprises resume work and production gradually advance, and domestic demand consumption gradually The recovery of China's economy can be expected; coupled with increased external risks, it will also highlight the allocation value of the A-share market and is optimistic about the medium- and long-term investment opportunities in the A-share market.
In this regard, Zhang Yidong, chief strategy analyst of Industrial Securities also held similar views. Zhang Yidong said that in the short term, A-shares are still facing the adjustment pressure of “cold spring and cold”. In the next few weeks, the European and American stock markets may have a shock bottom, and the unstable state of frequent ups and downs, investors should be alert to overseas market risks. In the medium term, Chinese assets have a safe-haven effect, especially considering that China's official stable growth policy continues and that the Chinese stock market is actively attracting long-term funds, including overseas funds, A shares are expected to emerge from the independent market in the future. (Finish)