In terms of choosing structural opportunities in the medium and short term, Shanghai Securities suggests paying attention to the following in the short term: the rebound opportunity for real estate stocks after the release of the list of second and third-tier cities with purchase restrictions; the trading opportunity for broker stocks as the margin trading and short selling business, which has been piloted for nearly 17 months, is about to enter regular supervision; and the medium-term opportunity in the liquor industry. Special attention should be given to the fact that the "12th Five-Year Plan" for new material industries will provide extremely broad space for the future application of neodymium-iron-boron permanent magnet materials. Related listed companies have already reached a turning point in performance.
Based on the judgment of the medium and short-term trend that "a weak short-term rebound will occur, and a strategic stalemate stage will enter in the medium term," the current investment strategy recommendation is to focus on a medium-term buying strategy while implementing a flexible swing trading strategy in the short-term weak oscillation to reduce the cost of medium-term positions.
Compared to the concerns about economic growth slowdown triggered by interest rate hikes and intensified property market control policies, the medium-term positive effect of RMB Qualified Foreign Institutional Investor (RQFII) has almost been ignored by the market. The sensitivity to negative news and numbness to positive news further highlight the pessimistic sentiment in the market.
On the other hand, the Ministry of Housing and Urban-Rural Development announced the "five criteria" for second and third-tier cities under purchase restrictions. Although it did not exceed market expectations, in the currently pessimistic market atmosphere, it caused two negative impacts on the market: first, the release of the list of second and third-tier cities with purchase restrictions may further exacerbate the market's concern over the decline in investment growth in the second half of the year. A drop of 20-30 yuan/ton in the price of cement in East China last week once triggered market panic. Second, under the background of increasing risks of a global economic double-dip, continuing tight property controls at this time will further increase the risk of economic downturn, and memories of the pain from 2008 are spreading across the market.
On the one hand, last week, central bank bill issuance rates rose across the board, once again triggering the market's sensitive nerves about interest rate hikes. Shanghai Securities believes that the reasons for Standard & Poor's downgrade of the U.S. rating were mainly due to policy risks brought by the political struggles between the two parties in the United States, rather than substantial changes in the fundamentals of the U.S. economy. After the brief event-driven impact, judgments about the direction of our country's monetary policy still need to return to the important task of controlling overall price levels. Inflation pressure remains relatively high in the medium and short term, and monetary policy needs to maintain a certain degree of tightening. The People's Bank of China's second-quarter monetary policy report has placed interest rates at the top of the policy tool mix, so it is reasonable for the market to once again tighten its nerves regarding interest rate hikes. There is still pressure for subsequent tightening policies. However, under the backdrop of inflation peaking and then declining, another interest rate hike may become a turning point for marginal improvement in policy, so the expectation of interest rate hikes is unlikely to form sustained selling pressure.
The report believes that a major reason for the A-share market's rebound being obstructed last week and returning to weakness was the disturbance caused by negative policy expectations, reflecting the overly pessimistic sentiment in the market.
Shanghai Securities recently released a strategy report stating that there are signs of overcorrection in the market's revision of overly optimistic expectations for earlier policy improvements. Market sentiment is rapidly switching from optimism to excessive pessimism. Considering other influencing factors, the short-term index is expected to continue a weak rebound above the 2500-point level, and the medium-term index may enter a strategic stalemate phase within the 2400-2600-point range.
Shanghai Securities: A-shares Show Excessive Pessimistic Signals
Similar views exist to some extent among institutions. Due to continued tensions in policy and liquidity, institutions generally expect the short-term market to remain in a weak oscillation pattern. (Shanghai Securities News ⊙ Reporter Pan Shengtou ○)
Guotai Junan believes that the current market, under the pressure of internal policies and external shocks, is already at a medium-term low. The possibility of further declines is low. However, inflation constrains the relaxation of policies, making it difficult for the market to have a significant rebound. Overall, the upward and downward space for A-shares is limited, but the possibility of an upward move is increasing.
Moreover, since the start of this week, the linkage effect between A-shares and the external market has significantly weakened, and the core factors affecting the market have returned to policies and liquidity. Overall, although institutions recognize the current valuation level of the market, they generally take a cautious stance on whether the rebound will continue.
After fully filling the upper gap, the index showed a retracement, which had a significant impact on the confidence of the market that had just begun to recover. From the perspective of intra-day hot sectors, small and medium-sized theme stocks remained active, while blue-chip stocks lacked highlights, indicating that investors are mainly treating the current market from a speculative angle.
Relevant statistical data also shows that the large-scale funds flowed out again yesterday, with a net outflow amounting to 6.2 billion yuan. Sectors with higher gains such as pharmaceuticals, computers, and electronic information saw more inflows, while non-ferrous metals, chemical fibers, brokers, insurance, and real estate became major sources of fund outflows.
Despite some strong stocks experiencing profit-taking, the market continued with its small-cap stock style since the beginning of the week. The ChiNext Index and the SME Board Index continued to outperform the main index. However, individual stocks began to diverge, with more than 10 stocks hitting the daily limit up. Sector-wise, thematic sectors like the Internet of Things, electronic payment, and computers led the gains, while previously leading sectors like cement, building materials, insurance, and non-ferrous metals fell sharply.
At the close, the Shanghai Composite Index stood at 2541.09 points, down 12.93 points or 0.51%; the Shenzhen Component Index was at 11238.95 points, down 4.47 points or 0.04%. The total turnover of the two markets amounted to 146.8 billion yuan, slightly higher than Tuesday.
On Tuesday, the U.S. stock market experienced a big rebound, but this positive news failed to effectively stimulate the domestic market. The Shanghai and Shenzhen indices opened slightly higher, followed by an upward attack. The Shanghai Index approached the 10-day moving average and completely filled the gap left on the previous Friday. However, due to insufficient volume, it encountered resistance and retreated. In the afternoon, the index continued to fall under the pressure of earlier profits.
A-shares showed a repeat of the rebound and retreat on Wednesday. The decreased activity of individual stocks and the lack of willingness to chase gains indicate the market remains in a weak state. Institutions' views on the market trend tend to be cautious, believing that A-shares will maintain a weak oscillation at the bottom in the short term.