(Economic Observation) A-shares rise in the first quarter, and where will they go in the second quarter?

　　China News Service, Beijing, March 31 (Reporter Xia Bin) The first quarter of 2021 ended, and the A shares showed a trend of callback after rising.

On the last trading day of March, the three major stock indexes all closed down. Judging from the performance of the entire first quarter, the Shanghai Composite Index fell 0.9%, the Shenzhen Component Index fell 4.78%, and the ChiNext Index fell 7%.

　　February 18 was the demarcation point for the trend of A-shares in the first quarter. The three major stock indexes all reached their highest points in the first quarter on the same day. After that, the market fluctuated downward. In March, the market experienced a significant correction and trading sentiment was sluggish. The range is 5.34%.

　　According to Wind data, in terms of sectors, gas and water, electric power, and chemical sectors were among the top gainers in March, and carbon neutral and carbon peak concept stocks were also sought after, while construction machinery, precious metals, and petroleum sectors experienced significant declines.

It is worth noting that the leading stocks of the previous fund holdings have seen a significant correction.

　　From the perspective of capital, since March, the northbound funds have still been buying more and selling less, with a total net inflow of 18.71 billion yuan (RMB, the same below), of which 18.122 billion yuan inflow from Shanghai Stock Connect and 5.88 yuan from Shenzhen Stock Connect 100 million yuan.

　　Under the market turmoil, many "net celebrity" funds have fallen more than 20% recently.

The "First Quarter Christian Report" released by 10 fund companies including Wells Fargo Fund, Invesco Great Wall Fund, and Penghua Fund in conjunction with Alipay's wealth management platform stated that in addition to market fluctuations, chasing rises and losses and frequent transactions also contributed to "funds making money." The main reason for the dilemma of "people do not make money" is that more than 70% of users who hold funds for less than 3 months have suffered losses.

　　However, it should also be noted that the fundamentals of China's economy are still recovering steadily.

According to the latest data from the National Bureau of Statistics of China, China's Manufacturing Purchasing Managers Index (PMI) was 51.9%, 1.3 percentage points higher than last month. The manufacturing boom has rebounded, and the import index has also hit a recent high.

　　So, have the A-shares that had been on the "roller coaster" in the first quarter got rid of "pessimism"?

　　"After the sharp drop in the previous period, many high-quality stocks have gradually fallen out of value and began to attract bargain-hunting funds. Of course, it will take a certain time for the market’s confidence to recover, so it is still difficult to regain the upward trend in the short term. The stage of shock and rebound.” said Yang Delong, chief economist of Qianhai Open Source Fund.

　　Soochow Securities’ strategy team issued a research report stating that the market is expected to usher in a rebound in the first quarter of the market in the short term. In the second quarter, inflation will gradually show pressure on the cost side. The market will still be possible in the second quarter before a recovery in effective demand is observed. Maintain the turbulence pattern, and maintain optimistic expectations for the full-year earnings of A-shares.

　　Yang Delong believes that as countries around the world begin to promote vaccination, the new crown epidemic may be effectively controlled in the second half of this year, and the global economy is truly on the path of recovery. This should be a long-term support for the performance of the A-share market.

　　In the face of stock market volatility, what should investors do?

"We must have a good attitude toward investment." Yang Delong reminded that investors should not increase leverage first, secondly do not trade frequently, and thirdly, they must use spare money to invest.

　　Many fund companies have also issued research and judgments on the market.

"Investment is a long-term business, and it is not appropriate to treat a'marathon' as a '100-meter race'." Wells Fargo Fund said that since 2021, capital market volatility has increased, and many investors are quite anxious, chasing ups and downs.

But from the current point of view, "the capital market is in the spring, and the public equity industry is still young."

Only long-term investment can share the dividends of corporate growth and smooth out the risks of economic and market fluctuations.

(Finish)