On March 4, the three major stock indices of the Chinese stock market fell, the Shanghai and Shenzhen markets evaporated 1.8 trillion dollars a day, China’s largest stock Guizhou Maotai plunged 6%, market value since the opening of the market in the yellow calendar New Year shrunk by more than 700 billion. Some analysts believe that the speech made by Guo Shuqing, chairman of the Communist Party of China Banking and Insurance Regulatory Commission, on March 2 about the bubble in the financial and real estate markets has triggered a market shock, and with investors generally in a fragile state of mind, the index will see a substantial shock at the slightest wind.
The three major stock indices fell together and 1.8 trillion evaporated in Shanghai and Shenzhen
Thursday (March 4), China’s A-shares across the board weakened, after the afternoon fell to expand, the Shanghai index fell by more than 2%, fell below 3500 points, the GEM index also once fell heavily by more than 5%, the brewery sector fell by more than 5%, the Shanghai and Shenzhen two markets evaporated 1.8 trillion in one day
By the end of the day, the Shanghai index at 3503 points, down 2.05%, the Shenzhen index at 14416 points, down 3.46%, the GEM index at 2851 points, a plunge of 4.87%, the two cities a total of more than 970 billion yuan; as of the close of A shares, statistics show that the total net outflow of northward capital 7.369 billion yuan. Among them, the Shanghai Stock Exchange net outflow of 2.218 billion yuan, the Shenzhen Stock Exchange net outflow of 5.151 billion yuan.
Thursday market all day unilateral downward, the GEM index fell nearly 5%, the individual stocks fell, up more than 9% stocks nearly 50, poor money-making effect, the data show that a total of 33 billion funds fled small and medium-sized venture.
Yesterday (March 3) closing, Shanghai and Shenzhen market capitalization of 82.09 trillion yuan, and to today (March 4) closing, the total market value of the two cities fell to 80.25 trillion yuan, down 1.8 trillion yuan.
Wind data shows that the northbound funds unilaterally net selling 7.369 billion yuan throughout the day, a new high of nearly six months; last trading day northbound funds significantly net buying more than 9 billion yuan.
Institutional hold stocks again leaked wildly, depressing the market, Tongwei shares fell, Ganfeng lithium, Longi shares, Wanhua Chemical fell more than 9%, Guizhou Maotai fell 5%, Wuliangye, Ningde Times fell more than 6%, Golden Dragonfish, Aier Eye, Weir shares, Zijin Mining fell more than 7%.
The SSE 50 index fell 2.85%, and the two markets traded 972 billion yuan throughout the day, compared with 863.2 billion yuan last day.
Guizhou Maotai shares fell today (March 4), with the lowest intraday share price at 2010.10 yuan, down 6.07%. Since hitting a record high on February 10, Guizhou Maotai has fallen by more than 22% in total.
Based on the closing price of 2601.00 yuan on February 10, the last trading day before the festival, Guizhou Maotai’s market value evaporated 713.520 billion yuan in 11 trading days after the festival.
As of the close, Guizhou Maotai reported 2033.00 yuan, down 5.00%, with a turnover of 13.297 billion yuan, a turnover rate of 0.52%, and a total market value of 2553.850 billion yuan.
Today (March 4) the fund’s major long positions fell even more, many fell more than 5%. The first major long position in Maotai fell 5%, billion lithium energy fell more than 10%, Longi shares fell more than 9%, Aier Eye, Ningde Times, China in the free and so on also tragically killed; field active Xingquan Huyi, Fortune Tianhui, Xingquan trend, Xingquan Hireun all fell more than 3%.
Various software shows that the net value of popular funds plummeted, and the fund rushed on the hot search.
Guo Shuqing’s “bubble theory” affects market expectations
Guizhou Maotai’s market capitalization has evaporated by about $113 billion after the Yellow New Year holiday, along with concerns of policy tightening and the disintegration of “holdout stocks”.
Bloomberg reports that the plunge of Guizhou Maotai, China’s No. 1 stock, has rattled some of the top managers in the country’s $3 trillion fund industry.
Until three weeks ago, Guizhou Maotai was the most sought-after stock in China’s stock market. The liquor maker’s stock rose nearly 70 percent for all of 2020, soared a further 30 percent so far this year to a record high on Feb. 10, and has doubled in 2019. Chinese funds with record-sized cash have been adding to their holdings, fearing they will lose customers by falling behind their peers.
However, a comment by Guo Shuqing, chairman of the Communist Party’s Banking and Insurance Regulatory Commission, on March 2 sent shockwaves through the market. Guo issued a warning about the need to reduce leverage in China’s financial markets amid the growing risk of a global and Chinese real estate market bubble. This hit Maotai, which is highly liquid and widely held, the hardest.
Outsiders believe that Guo Shuqing’s speech released signals of monetary policy tightening.
Zhou Hao, a senior economist at Commerzbank Asia, wrote in the Financial Times on March 3 that Guo Shuqing’s speech had sent shockwaves through the financial markets ahead of the Communist Party’s two sessions, and that his “bubble theory” had shaken the market and begun to influence market expectations for monetary policy in the coming year. The “bubble theory” has shaken the market, but also began to influence the market expectations for the monetary policy in the coming year. To a large extent, it seems that the market has not yet reached a consensus on the policy direction, and only Time can give an answer to whether the round of asset mania will come to an abrupt end.
Zhou Hao writes that if one combs through Guo Shuqing’s speeches over the past few years, one will find that he prefers a prudent policy orientation, which may be exactly what has many market participants worried.
China’s leading financial commentator Shui Pi analysis on March 4, because the market is in the process of style change, the current investor mentality is generally fragile, from the past fear of missing the market has evolved into a fear of doing the wrong market mentality, like a bird of prey, the slightest movement of wind, the index will be a substantial shock.