China A-shares rally on Fed rate hike, global risk recovery; Shengu Group surges 297%
China's A-share market rallied in late September 2024, with the Shanghai Composite Index rising nearly 1% and the ChiNext Index gaining over 2% on September 18. Over 4,200 stocks advanced, and turnover reached 2.08 trillion yuan. The market recorded zero limit-down stocks for the third time that month. Newly listed Shengu Group surged up to 297% intraday. Analysts attributed the rebound to the Federal Reserve's 25-basis-point rate hike being fully priced in, easing geopolitical tensions, and declining oil prices. However, trading volume later shrank to 2.05 trillion yuan by September 21, with analysts warning of pre-holiday volatility.
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A-Share Market May See Volume Boost as Global Risk Appetite Recovers, Analyst Says
According to a market analysis published by 21st Century Business Herald and sourced from The Paper, China's A-share market saw broad gains on Monday, with the Shanghai Composite Index and ChiNext Index rising, driven by strength in innovative drugs and real estate sectors. However, trading volume shrank to 2.03 trillion yuan, down 45.6 billion yuan from the previous session, indicating hesitation among incremental investors. The analyst, holding license A1210623100001, attributes the cautious stance to the upcoming holiday effect. The report argues that global risk appetite is recovering due to easing geopolitical tensions and falling oil prices, which reduce inflation pressure and lower expectations of further Fed rate hikes. This environment is expected to encourage both existing and new capital to increase positions in A-shares before the holiday. The analyst identifies three potential investment directions: the overseas supply chain (innovative drugs, textiles, machinery, AI-related), domestic stimulus beneficiaries (real estate, new consumption), and the upcoming third-quarter earnings season.
Read sourceChina Stocks Rally as Second Recovery Phase Begins, Analysts Warn of Short-Term Volatility
Chinese A-share markets rose on September 21, with the Shanghai Composite gaining 0.97% to 3949.91, the Shenzhen Component up 0.65% to 13730.02, and the ChiNext Index adding 0.8% to 3399.59. Over 4,500 stocks advanced, with over 100 hitting daily limit-up, while total turnover shrank to 2.05 trillion yuan. Analysts cited the Federal Reserve's 25-basis-point rate hike as a 'last shoe to drop' that opened a rebound window, alongside positive signals from Sino-US trade talks in New York. China Merchants Securities said tech stocks with earnings support may see catch-up gains as capital returns to high-growth sectors. However, analyst Wang Xiaoli warned that pre-holiday effects, end-of-quarter institutional reviews, and cross-holiday risk premiums could cap the rally's height. Technical pressure from resistance levels and profit-taking after consecutive gains may also trigger volatility, according to the report.
Read sourceA-Share Market Sees 100 Stocks Hit Daily Limit as Second Round of Recovery Begins
Following the Federal Reserve's interest rate hike, global markets entered a phase of rebound, with A-shares completing a bottoming process last week and continuing to rally. On September 21, the Shanghai Composite Index closed at 3949.91 points, up 0.97%, while the Shenzhen Component Index rose 0.65%. Over 4,500 stocks advanced, with over 100 hitting the daily limit up, though total trading volume shrank by over 50 billion yuan to 2.05 trillion yuan. Analysts cited the Fed rate hike as a 'clearing event' and positive signals from US-China trade talks in New York as boosting sentiment. China Merchants Securities noted that the tech sector, which had seen crowded positions unwind, is now seeing capital inflows, and expects a turning point. CITIC Securities stated that macro uncertainties from Middle East tensions and US bond yields have subsided, allowing the market to refocus on earnings. However, analyst Wang Xiaoli warned that pre-holiday effects, institutional quarter-end assessments, and technical resistance could limit the rally's upside and cause volatility, with the Shanghai index potentially needing a pullback to confirm its breakout.
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Chinese Institutions See Timely Rebound Window for A-Share Market Amid Fed Rate Hike
This article from East Money aggregates the latest investment strategies from major Chinese institutions regarding the A-share market outlook. It notes that the Shanghai Composite Index rose 0.61% for the week, while the Shenzhen Component Index gained 1.26% and the ChiNext Index rose 1.52%. Multiple institutions argue that the rebound is timely, citing that investor concerns about geopolitics, oil prices, and Fed rate hikes have been largely priced into valuations. They point to the Fed's September rate hike as a 'boots-on-the-ground' event that removes a key uncertainty, allowing risk appetite to recover. Institutions forecast a continued recovery into October, driven by positive factors including potential US-China trade talks, domestic stimulus policies, and AI industry trends. Some analysts compare the current market to the 1999 '519 rally' and suggest the market is in an early stage of a fifth wave. They recommend focusing on sectors that have corrected significantly, such as ChiNext, non-bank financials, media, and computers, while noting that AI supply chain stocks with strong earnings remain attractive. The article emphasizes that the rebound window may be limited by upcoming political events and holiday-related volatility.
Read sourceA-Share Market Sees Zero Limit-Down Stocks; Newly Listed Stock Surges Nearly 5x Intraday
On September 18, China's A-share market rallied, with the Shanghai Composite Index rising nearly 1% and the ChiNext Index gaining over 2%. More than 4,200 stocks advanced, and total turnover reached 2.08 trillion yuan, up 254 billion yuan from the previous session. For the third time this month, the market recorded zero limit-down stocks (excluding ST shares), while nearly 80 stocks hit their daily limit up, indicating a significant rise in short-term sentiment. Unlike previous instances, major indices closed with solid gains. The market followed a 'rebound → minor divergence → re-rebound' pattern this week, with volume expanding moderately. This aligns with global equity trends, where markets priced in a rate hike, took profits, and then rallied. Huaxi Securities commented that the Fed's 25-basis-point rate hike has been largely priced in, reducing macro uncertainty and opening room for A-share recovery. They noted that the end of the rate hike cycle could improve external conditions for valuation repair and sentiment recovery. Key highlights include the surge of newly listed Shengu Group, which triggered multiple trading halts and saw intraday gains of up to 297%, and strength in the semiconductor sector, driven by Morgan Stanley's forecast on advanced packaging and Nvidia's CEO projection of doubling chip sales by 2027.
Read sourceA-Share Market Sees Zero Limit-Down Stocks Again; Sub-New Stock Surges Nearly 500% Intraday
On September 18, A-shares experienced volatile gains with the Shanghai Composite Index rising nearly 1% and the ChiNext Index surging over 2%. The market recorded 'zero limit-down' stocks (excluding ST) for the third time in September, while limit-up stocks approached 80, indicating warming short-term sentiment. Turnover on the Shanghai and Shenzhen exchanges reached 2.08 trillion yuan, up 254 billion yuan from the previous day. Sub-new stocks, led by Shengu Group which surged up to 297% intraday on its second trading day, generated significant wealth effects. The semiconductor chain showed unusual strength from the open. Huaxi Securities believes A-shares are poised for a new recovery, citing four reasons: negative news priced in, Fed rate hike cycle ending, potential geopolitical cooling, and sustained tech sector prosperity. China Merchants Securities views the Fed's hawkish rate hike as the 'other shoe dropping' and expects markets to return to industry-based pricing. The article notes that temporary halts in new stocks can signal shifts in liquidity and sentiment, and with current market levels, an upward shift appears more probable.
Read sourceA-shares see zero limit-down stocks; sub-new stock surges nearly 5x; institutions see recovery
On September 18, A-shares rallied with the Shanghai Composite Index up nearly 1% and the ChiNext Index surging over 2%. Over 4,200 stocks closed higher, and turnover reached 2.08 trillion yuan. The market recorded 'zero limit-down' stocks for the third time in September, with nearly 80 limit-up stocks. Sub-new stock Shengu Group, listed on September 17, surged intraday by up to 297%, giving bottom-buyers a theoretical maximum floating profit of 462.6%. Huaxi Securities' strategy team believes A-shares are poised for a new recovery, citing four reasons: negative news fully priced in, the Fed's rate-hike cycle ending, potential cooling of geopolitical conflicts and oil prices, and continued high prosperity in the tech sector. China Merchants Securities views the Fed's hawkish 25bp hike as the 'other shoe dropping' and expects gradual desensitization to macro factors. Two sectors stood out: sub-new stocks, driven by Shengu Group's performance, and the semiconductor industry chain, supported by Morgan Stanley's report on advanced packaging and NVIDIA's chip sales forecast.
Read sourceA-Share Rebound Strengthens With Zero Limit-Down Stocks; New Stock Surges 5x Intraday
On September 18, A-shares rebounded strongly, with the Shanghai Composite Index rising nearly 1% and the ChiNext Index gaining over 2%. More than 4,200 stocks advanced, and combined turnover on the Shanghai and Shenzhen exchanges reached RMB 2.08 trillion, up RMB 254 billion from the prior day. The market recorded 'zero limit-down' stocks (excluding ST) for the third time in September, while limit-up stocks approached 80, indicating a significant rise in short-term sentiment. Newly listed Shengu Group surged as much as 297.07% intraday after opening down nearly 28%, triggering multiple trading halts. Huaxi Securities attributed the rebound to the Federal Reserve's rate hike being fully priced in, reduced macroeconomic uncertainty, and easing geopolitical tensions. The firm also noted that declining oil prices and sustained high prosperity in the technology sector support valuation repair. Semiconductors led the rally from the open, while Morgan Stanley projected the advanced packaging market could reach hundreds of billions of yuan. The article suggests that if U.S. equities continue strengthening, expectations for A-shares next week may rise further.