On Monday, the three major A-share indices shocked down, as of the close, the Shanghai composite index fell 1.09% to close at 3412 points; deep into a decline of 2.30% to close at 13,495 points; the GEM index fell 2.28% to close at 2719 points.
On April 12, the Shanghai and Shenzhen markets both opened low, the market popularity is relatively low, the white horse stocks generally fell. Shanghai composite index retreated to 3400 points near the pass, deep into the index, the GEM index fell more than 2%.
The CSI 300 index closed down 1.7% to 4,947.75 points, while the CSI 300 raw materials index and CSI 300 transportation index fell 3.9% and 4.1% respectively, leading the market lower.
Courier giant Shunfeng Holdings fell 9.4% heavily, after the company plunged 10% on Friday after announcing a huge loss in the first quarter.
On the board, Hainan, steel and electricity sectors were the top gainers, while silicones, phosphorus chemicals and paper were the top losers.
A representative index of the fund’s long positions, the Mao Index plunged 2.67% today (April 12).
According to a report by Hua An Securities, investors are concerned that the Chinese Communist Party authorities will soon tighten monetary policy and market liquidity is facing challenges.
In addition, growing tensions between the U.S. and China have affected market popularity.
On Sunday, Secretary of State John Blinken said the U.S. is concerned about aggressive actions by the Chinese Communist Party against Taiwan and warned that anyone attempting to change the status quo in the Western Pacific by force would be making a “grave mistake.
Bloomberg: China’s Asset Appeal Eroded
Bloomberg reported on April 11 that Chinese financial assets have been sold off by investors since the Chinese New Year on the yellow calendar, as a combination of a higher U.S. dollar and U.S. bond rates due to the U.S. economic recovery and expectations of tighter Chinese policy is eating into the attractiveness of Chinese assets.
China’s stock market is currently involved in a global “valuation kill” whirlpool, the A-share rally at the beginning of the year came to an abrupt end after the Chinese New Year, with Guizhou Maotai as the core of the white horse shares once fell by 20-30%. Recently, U.S. stocks regained momentum and record highs, A-shares but the desire to revitalize weak. Currently, the CSI 300 index of A-shares has erased the 11% gain before the Chinese New Year.
UBS China head of strategy Liu Mingsi said the rotation of sectors and themes is accelerating recently, but the performance is not sustainable, and the Chinese capital market lacks themes suitable for medium- and long-term investment.
He said, “The marginal tightening of (Communist Party of China) monetary policy means investors’ risk appetite will be fragile, and equity market participation and volume will be more inactive in the short term.”
Shares of Meituan and others fell in Hong Kong after the Asian session opened on Monday, following last weekend’s (April 10) astronomical $2.8 billion fine imposed on Alibaba by Chinese Communist Party regulators, as well as a media report that Chinese Communist Party regulators intend to increase staffing and resources to step up efforts to crack down on monopolistic practices by large companies.
Herald van Der Linde, head of Asian equity strategy at HSBC, said, “All Asian stocks are at risk, and China is not immune.”
For Herald van Der Linde, climbing global bond yields, along with the topping out of the earnings cycle for Asian companies, are putting downward pressure on Asian stocks in the near term.
He said there is a risk of further declines in Chinese Internet company stocks, taking valuations into account, while value sectors such as financials and raw materials are relatively bullish.
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