Shanghai Stock Index Surpasses 3000 Points with Liquor and Real Estate Sectors Leading the Charge
On September 26, the Shanghai Stock Index experienced a remarkable rally, closing above the 3000-point landmark, an achievement marked by substantial gains across major sectors. The index ascended by more than a hundred points by the day's end, culminating in a robust increase of 3.61%. Concurrently, Shenzhen's Composite Index and the Growth Enterprise Market Index also enjoyed gains exceeding 4%. Over 5100 stocks across the market trended upward, signaling a broad-based optimism.
In terms of trading volume, the exchanges in Shanghai and Shenzhen saw transactions exceeding one trillion yuan for two consecutive trading days, highlighting a significant surge in market activity. The liquor sector was one of the standout performers, with more than ten stocks hitting their upper limit, including Kweichow Moutai which reclaimed the 1500 yuan level. Similarly, the real estate sector showed significant strength with prominent firms such as Vanke A and Greenland Holdings among those experiencing the day’s maximum allowable increase.
These movements in the stock market came shortly after a crucial meeting by the Central Political Bureau of the CPC, where economic situations were analyzed and plans for forthcoming economic tasks were laid out. The meeting underscored the need for enhanced counter-cyclical adjustments in fiscal and monetary policies, ensuring essential expenditure and support for grassroots stability. The discussion also covered strategic issuance of ultra-long-term special government bonds and local government special bonds to foster government-led investments. Additionally, steps were planned to lower deposit reserve rates and implement meaningful rate cuts to stabilize and boost the real estate market.
Authorities expressed the intention to revitalize the capital market vigorously, encouraging the entry of mid-to-long-term funds into the market and improving the mechanism for funding areas like social security, insurance, and financial management. There was also support mentioned for mergers and acquisitions among listed companies and continuous progress in public fund reforms, alongside policies aimed at protecting small and mid-size investors.
Analysts remain optimistic about the potential for a sustained rebound in the market. According to Chen Guo, chief strategy analyst at CITIC Securities, the signals from the meeting are strongly pro-growth and pro-market, expectedly benefiting both profitability and valuation perspectives of stocks. Looking ahead, the main indexes in the A-share market are anticipated to test their previous yearly highs witnessed in May.
In contrast, China Gold Corporation highlighted that while the market has undergone adjustments since late May, recent policy measures aimed at stabilizing growth projections have notably cheered the market environment, inciting a bullish sentiment. However, any immediate outcomes post this rapid rise could see some fluctuation, yet the rebound trend appears sustainable. They advised investors to focus on sectors that might benefit from the inflow of mid-to-long-term capital, like blue-chip stocks, state-owned enterprise reforms, and dividend-paying companies.
Everbright Securities notes that, given the rapid recovery, the Shanghai Index is no longer near its low, suggesting that a 'double bottom' pattern has formed, indicating a probable upward trajectory. However, due to the swift rebound and the considerable profits accrued, some back-and-forth in the market is expected in the near term. Overall, the indexes are expected to experience oscillating but generally upward movement, reflecting the resilience and potential momentum of the market moving forward.
In conclusion, the Shanghai Stock Exchange's vault over the 3000-point mark alongside the rallying of key sectors reflects a robust sentiment bolstered by optimistic governmental policies, a rejuvenated investor confidence, and a supportive economic outlook. As the market integrates these elements, prospects of a continued upward trend seem promising, echoing the opening surge and pointing towards a period of sustained growth and stability in the Chinese stock market.
In terms of trading volume, the exchanges in Shanghai and Shenzhen saw transactions exceeding one trillion yuan for two consecutive trading days, highlighting a significant surge in market activity. The liquor sector was one of the standout performers, with more than ten stocks hitting their upper limit, including Kweichow Moutai which reclaimed the 1500 yuan level. Similarly, the real estate sector showed significant strength with prominent firms such as Vanke A and Greenland Holdings among those experiencing the day’s maximum allowable increase.
These movements in the stock market came shortly after a crucial meeting by the Central Political Bureau of the CPC, where economic situations were analyzed and plans for forthcoming economic tasks were laid out. The meeting underscored the need for enhanced counter-cyclical adjustments in fiscal and monetary policies, ensuring essential expenditure and support for grassroots stability. The discussion also covered strategic issuance of ultra-long-term special government bonds and local government special bonds to foster government-led investments. Additionally, steps were planned to lower deposit reserve rates and implement meaningful rate cuts to stabilize and boost the real estate market.
Authorities expressed the intention to revitalize the capital market vigorously, encouraging the entry of mid-to-long-term funds into the market and improving the mechanism for funding areas like social security, insurance, and financial management. There was also support mentioned for mergers and acquisitions among listed companies and continuous progress in public fund reforms, alongside policies aimed at protecting small and mid-size investors.
Analysts remain optimistic about the potential for a sustained rebound in the market. According to Chen Guo, chief strategy analyst at CITIC Securities, the signals from the meeting are strongly pro-growth and pro-market, expectedly benefiting both profitability and valuation perspectives of stocks. Looking ahead, the main indexes in the A-share market are anticipated to test their previous yearly highs witnessed in May.
In contrast, China Gold Corporation highlighted that while the market has undergone adjustments since late May, recent policy measures aimed at stabilizing growth projections have notably cheered the market environment, inciting a bullish sentiment. However, any immediate outcomes post this rapid rise could see some fluctuation, yet the rebound trend appears sustainable. They advised investors to focus on sectors that might benefit from the inflow of mid-to-long-term capital, like blue-chip stocks, state-owned enterprise reforms, and dividend-paying companies.
Everbright Securities notes that, given the rapid recovery, the Shanghai Index is no longer near its low, suggesting that a 'double bottom' pattern has formed, indicating a probable upward trajectory. However, due to the swift rebound and the considerable profits accrued, some back-and-forth in the market is expected in the near term. Overall, the indexes are expected to experience oscillating but generally upward movement, reflecting the resilience and potential momentum of the market moving forward.
In conclusion, the Shanghai Stock Exchange's vault over the 3000-point mark alongside the rallying of key sectors reflects a robust sentiment bolstered by optimistic governmental policies, a rejuvenated investor confidence, and a supportive economic outlook. As the market integrates these elements, prospects of a continued upward trend seem promising, echoing the opening surge and pointing towards a period of sustained growth and stability in the Chinese stock market.
Last edited at：2024/12/16
#Kweichow Moutai