The US stock market showed mixed gains and losses overnight. Today, the Shanghai and Shenzhen indices opened slightly lower with a gap, then continued to operate at low levels under the drag of weakness in non-ferrous metals and conceptual stocks. After several rounds of bottom probing, the SSE Composite Index touched an intraday low of 3214.84 points. After noon trading, the banking and insurance sectors jointly supported the market, causing the index to surge dramatically. The SSE eventually broke through the 3300-point mark. At the close, the SSE Composite Index stood at 3317.04 points, up 52.41 points with a turnover of 263.2 billion yuan; the Shenzhen Component Index closed at 13884.9 points, up 125.1 points with a turnover of 152.4 billion yuan. The turnover in both markets significantly increased compared to the previous trading day.
In terms of sector and individual stocks, due to market expectations that the stock index futures would be launched soon, leading to a reversal of market style, large-cap blue-chip stocks with enhanced configuration value presented a long-awaited broad-based rally, while small and medium-sized cap stocks that had been strong for a prolonged period were almost entirely wiped out. PetroChina and Sinopec both rose over 3%. Bank stocks rebounded first, CITIC Bank hit the daily limit up, Ningbo Bank rose 9.3%, Nanjing Bank rose 7.22%, Hua Xia Bank, Industrial Bank, Beijing Bank, and Shenzhen Development Bank A all rose more than 5%. Brokers and insurance companies also saw sharp rises, China Pacific Insurance hit the daily limit up, Haitong Securities rose 7.14%, China Life Insurance rose 6.14%, and Citic Securities rose 4.85%. Small and medium-sized cap stocks fell sharply, with most ChiNext stocks approaching the daily limit down. Among them, Baode Shares, Jifeng Agricultural Machinery, Rishen Tech, Lissechen, and Yinzhuang Shares all hit the daily limit down. Yesterday's newly listed SME board stocks, Santai Electronics and Ruihai Communications, also hit the daily limit down. In total, there were 10 stocks hitting the daily limit up in the Shanghai and Shenzhen markets, including Jiangling Motors, Xinda Zhou A, Zhongyin Shares, Taihua Shares, Xuguang Shares, and Xingma Automobile.
From a news perspective, there are a few points worth noting: First, on December 3, the Shenzhen Stock Exchange announced that it had imposed a three-month restriction on trading measures on the "Jiexxx" account involved in the speculation of Jifeng Agricultural Machinery, emphasizing that the average P/E ratio of the 28 ChiNext stocks has reached as high as 145 times, indicating significant market risks. The Shenzhen Stock Exchange will continue to maintain a high-pressure stance against major abnormal trading behaviors. Second, Wang Zhaoxing, Vice Chairman of the China Banking Regulatory Commission (CBRC), wrote in the latest issue of the China Finance magazine that the CBRC currently requires a minimum capital adequacy ratio of 11% for large banks. Wang Zhaoxing pointed out that China establishes dynamic capital and dynamic provisioning requirements based on changes in macroeconomic conditions. Currently, the minimum capital adequacy ratio requirement for small and medium-sized banks is 10%, while for large banks, it is 11%.
Regarding future market trends, today's wide-ranging fluctuations in the market led to the closing of a medium-sized bullish candlestick with a lower shadow, pushing the SSE above 3300 points under the influence of heavyweight stocks. Significant changes appeared in today's market, despite the substantial rise in the index, far more stocks fell than rose. There are two reasons for this: First, the ChiNext plummeted significantly under the scrutiny of regulatory investigations, dragging down the entire small-cap sector. Second, under the expectation of the launch of stock index futures, large-cap blue-chip stocks moved accordingly, re-enacting the "two-eight phenomenon" in China's financial circles. Especially the bank stocks experienced a surge, while previously hyped thematic stocks plummeted across the board. The stabilization and rebound of heavyweight stocks prompted the market indices to return to an upward channel, with a significant increase in turnover. If the blue-chip stock trend resonates with the market next week, the SSE could potentially challenge its previous highs. However, such a shift in market style won't be completed quickly. For the market to truly strengthen, there must be a profit-making effect. Relying solely on the performance of blue-chip stocks isn't enough; market hotspots need to bloom comprehensively. Otherwise, the sustainability of the market trend becomes questionable. Data from the Soufu Capital Monitoring Platform shows that the Shanghai market saw a net outflow of 5.26 billion yuan today, while the Shenzhen market saw a net outflow of 3.75 billion yuan. In the short term, the market closed with a medium-sized bullish candlestick this week, and under the impetus of large-cap stocks, the market still has upward momentum next week. Operationally, investors can pay attention to the price-volume coordination of blue-chip stocks and consider appropriately buying into institution-heavyweight stocks.
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