Highlights

In a surprising turn, the A-share market experienced a significant decline by the end of the trading day, prompting major funds to step in. On May 23, major indices turned red; the Shanghai Composite Index dropped by 0.94%, indicating broad sell-offs. Notably, big funds noticeably increased their buying activity as evidenced by a spike in trading volumes of key ETFs.

Sentiment Analysis

• Overall market sentiment was mixed, with a sharp decline in key indices raising investor concerns.
• The automotive and pharmaceutical sectors showed resilience with moderate gains, although their momentum slowed compared to the morning session.
• There was significant activity in ETFs, suggesting underlying investor confidence in key sectors, despite the day's decline.

Article Text

The financial markets witnessed unexpected volatility as the A-share market saw a substantial sell-off by the end of trading on May 23. The Shanghai Composite Index dropped by 0.94%, while the Shenzhen Component Index fell by 0.85%, and the ChiNext Index declined by 1.18%. This downturn was characterized by a significant increase in market turnover, which reached 11,826 billion yuan, up by 429 billion yuan from the previous day.

Despite the overall market decline, specific sectors such as automotive and pharmaceuticals maintained relative stability, albeit with reduced gains as compared to the morning session. Some stocks managed to hit their limits; for instance, Seres secured its limit, demonstrating ongoing investor interest following rumors of its humanoid robot prototype. However, the company clarified that any official business information should be regarded strictly from official communications.

On the downside, the transportation sector faced a major downturn, with stocks within the duty-free and logistics areas falling sharply. Notably, companies like Nanjing Port and Lianyungang hit their floor prices, signaling a collective dip amongst transport-related stocks.

Interestingly, the market dip coincided with notable movements in major ETFs, indicating that large funds were making strategic purchases. Increased activity was observed in the volumes of the Huatai-PB CSI 300 ETF and E Fund CSI 300 ETF, amongst others, highlighting a focused effort by big funds to potentially stabilize the market.

Key Insights Table