Chinese stock markets closed lower across the board.
On Monday, the U.S., Canada, the U.K. and the EU sanctioned a number of current and former Chinese Communist Party officials over Xinjiang, and on Tuesday, Chinese stocks closed lower across the board, with the Shanghai Composite Index once losing 3,400 points and the Growth Enterprise Market Index once falling 2 percent, with outflows of more than 7 billion yuan from northbound funds (foreign capital). Analysts said that the sanctions imposed by the U.S. and other Western countries on the CPC have weakened the market’s risk appetite, and investors have become more and more cautious due to concerns about tightening CPC policies.
On Tuesday, the A-share market sentiment collapsed, with all three major stock indexes killing the market. The Shanghai Composite Index closed down 0.93% to close at 3411.51 points; the Shenzhen Stock Index fell 1.12% to close at 13,607.27 points; and the Growth Enterprise Market Index fell 1.12% to close at 2,668.08 points.
From the point of view of the structure of the kill, pro-cyclical stocks fell heavily. Among them, electrolytic aluminum, magnesite and other wildly fell more than 6%. Market rumors of state reserves to throw 400,000-500,000 tons of aluminum ingots, aluminum prices as well as major aluminum stocks plunged.
The steel industry, which rose sharply in the previous period, also fell collectively. The carbon-neutral sector finally began to rest, and the carbon-neutral index closed down nearly 2%.
The CSI 300 index once fell 1.8%, extending its decline from this year’s high to more than 14%, falling below the support level of 5000 points.
In terms of news, on Monday (March 22), the US, Canada, the UK and the EU announced sanctions against the CCP over Xinjiang.
Cai Tong Securities analyst Jin Jing was quoted by Reuters as reporting that “the sanctions have dampened the willingness to take risks, especially from foreign investors, who sold stocks through the interconnected mechanism.”
Jin Jing added, “Fears that domestic policies will be tightened also continued to weigh on big-rising sectors and overvalued stocks, with investors becoming increasingly cautious.”
Wind data showed that on March 23, northbound funds (foreign capital) sold a net 7.184 billion yuan unilaterally throughout the day, after buying a net 7.163 billion yuan in the previous trading day.
The mainland media “Brokerage China” reported on March 23 that the inflow and outflow of foreign capital has considerable influence on the rise or fall of the A-share market.
The mainland media also commented that the A-share market is still too fragile and cannot afford a little wind.
Bloomberg reported on March 23 that analysts at Credit Suisse Group AG see a gloomy outlook for China’s stock market due to slowing earnings growth and overvaluation, and downgraded the market from a weight to a hold rating.
Analysts, including Dan Fineman and Kin Nang Chik, wrote in a report that “by many metrics, Chinese stocks look expensive right now.”