Chinanews.com Client, Beijing, March 16th (Xie Yiguan) After the global stock market finished the "Black Week" last week, the Asia-Pacific stock market continued to decline on the 16th. Japan and South Korea stock markets closed down, and the three major A-share indexes expanded their intraday losses. Eventually, the Shanghai index fell below the 2,800-point mark.

Shanghai stock index falls below 2800 points, technology stocks are severely tumbled

On the 16th, the FTSE China A50 Index futures fell 1.07% at the beginning of the trading session, and the decline continued to expand. At the time of writing, the futures fell more than 5%.

As of the close, the Shanghai Index fell 3.40% to 2789.25 points and fell below 2800 points; the Shenzhen Component Index fell 5.33% to 10253.28 points; the GEM Index fell 5.90% to 1910.77 points. The turnover of the two cities was 963.5 billion yuan. Among the northbound funds, the net outflow of Shanghai Stock Connect was 4.871 billion, and the net outflow of Shenzhen Stock Connect was 3.939 billion.

On March 16, the intraday chart of the Shanghai Index.

On the disk, a total of 318 shares rose in the two cities, 52 daily limit; another 3348 shares fell, 184 daily limit. In the industry sector, only the petroleum sector rose, while components, communications equipment, semiconductors, electrical equipment, telecommunications operations and other industry sectors fell the most. The concept section was fully green, and technology-related sections such as the Apple concept, 5G concept, and Huawei concept were severely defeated. Conceptual sections such as anti-flu, land transfer, and mask protection turned lower during the session.

Asia-Pacific stock markets suffer heavy losses

The Federal Reserve announced on the 15th local time that it will lower the target range of the federal funds rate to an ultra-low level of 0-0.25%, and cut the interest rate to zero.

Data Map: Federal Reserve Chairman Powell. Photo by China News Agency reporter Chen Mengtong

On the 16th, New Zealand, Australia and many other Asia-Pacific countries or regions followed the Fed's footsteps and adopted loosening policies such as interest rate cuts to increase market liquidity.

But interest rate cuts have not brought strong stimulus to financial markets. After the Federal Reserve announced interest rate cuts, the yield on 10-year US Treasury bonds fell by 32 basis points, and US stock index futures continued to fall, triggering trading restrictions during the session. As of press time, the S & P 500 index, Dow futures, and Nasdaq futures all fell more than 4%.

The Asia-Pacific market also performed poorly. The Nikkei 225 Index closed down 2.46% to 17002.04 points. The Korea Composite Index fell 3.19% to 1714.86 points. The Australian ASX200 Index closed 9.7% to 5002 points, the largest since June 1992 Decline; New Zealand NZX50 index fell 3.6% to 9947.94 points; Hang Seng Index closed down 4.03%.

On the 16th, the major European stock indexes also fell sharply at the opening. The German DAX index fell 5.4%, the British FTSE 100 index fell 4.8%, and the French CAC40 index fell more than 4% at the beginning of the session.

Changjiang Securities believes that the impact of monetary policy hedging in times of crisis is usually extremely limited. If the epidemic continues to accelerate overseas in the future, there will still be a large tail risk in overseas markets.

What is the future of the A-share market?

After the A-share plunge on the 16th, the market is generally concerned about whether the People's Bank of China will cut interest rates and whether the shock effect of the Fed ’s interest rate cuts on A-shares will continue.

On the 15th, Sun Guofeng, director of the Monetary Policy Department of the People's Bank of China, said that the People's Bank of China will continue to take a variety of measures to promote a marked decline in loan interest rates, and use a variety of monetary policy tools to maintain reasonable and sufficient liquidity.

On March 16, the People's Bank of China implemented a targeted reduction in quotas, releasing 550 billion yuan of long-term funds. However, on the 16th, the one-year MLF (Medium-Term Lending Facilitation) operation conducted by the People's Bank of China operated 100 billion yuan with an operating interest rate of 3.15%. Interest rates remain unchanged.

"China will take me as the mainstay and comprehensively consider the risk of RMB appreciation, hot money inflows, internal inflation and asset price bubble risks." Chen Guo, chief strategy analyst at Anxin Securities, believes that the spread between China and the United States indicates that China is still in a favorable position.

Information map of the People's Bank of China. Photo by Li Huisi issued by China News Agency

Under the pavement of policy reduction, research institutions generally believe that, from the current point of view, the global capital market is volatile, and the A-share market is more difficult, but the toughness is better than the external market, and A-shares may continue to fluctuate in the short term.

Li Daxiao, chief economist at Yingda Securities, said that the directional cut by the central bank has a significant positive impact on the stability of the stock market. "In addition, coordinated actions with the US Federal Reserve, the Bank of England, the European Central Bank, etc., also have a positive effect on stabilizing global stock markets."

Zhu Chaoping, global market strategist at JPMorgan Asset Management, reminded that the Fed's interest rate cuts provide the People's Bank of China with room to take further easing measures. But we also need to pay attention to the risks of economic outlook downgrade.

"After the outbreak in China, due to strong prevention and control measures, investors generally expect that China's economic growth will begin to have a V-shaped reversal in the second quarter. However, with the deterioration of the global epidemic and the escalation of prevention and control measures, the Chinese economy is facing external The risks are rising, and the magnitude of the reversal of economic growth may be suppressed. This may cause changes in market expectations and put pressure on the stock market. "Zhu Chaoping said.

Bohai Securities believes that the impact of the epidemic on the economy will eventually pass, and given the overweight domestic stability policies, external demand shocks are expected to hedging related investments and consumption through counter-cyclical adjustment policies, and the economy will eventually return to normal.

Based on factors such as "the current valuation of A shares is low, the implicit returns are high, and there are sufficient policy reserves to deal with the uncertainty of the global economy" and other factors, Yuekai Securities and other institutions believe that A shares still have structural investment opportunities. "The relative advantages of A-share fundamentals are better than overseas, and easing of external currencies also helps cut off the transmission of overseas liquidity risks to China."

Guosheng Securities believes that A-shares have their independence and will continue to be dominated by wide shocks in the short term. Opportunities will emerge in the shock. The logic of policy dividends and liquidity support is still there. (Finish)