Regulatory level to promote off-market allocations, the Shanghai Composite Index fell 1.1%
Under the supervision of the regulatory authorities, the news that the brokerages were required to check the off-exchange funds was dragged down. The Shanghai Composite Index fell 1.09% yesterday and the GEM index fell 4.49%.
The turnover of the Shanghai and Shenzhen stock markets shrank yesterday, but the total still exceeded 1 trillion yuan (RMB, the same below), and the overseas funds reappeared.
Trade agreement is unclear
Analysts pointed out that the regulatory layer has checked the off-market allocation for a slight cooling of the market, and the Sino-US trade agreement is uncertain. The short-term reversal pressure is still there. It is expected that the market will be dominated by repeated fluctuations, but the funds continue to flow in and after adjustment. The upward trend of the market volatility is expected to remain unchanged.
In response to the recent resurgence of over-the-counter allocations, the Mainland’s “21st Century Business Herald” quoted close to the regulatory authorities as confirming that regulators of the China Securities Regulatory Commission have recently requested brokerages at a special meeting on external access to regulated information systems and prevention of off-site fund-raising. To check the risk of off-site fund-raising, the sales department and employees must not facilitate the off-site fund-raising.
Affected by the above news, the mainland stock market three major indexes yesterday collectively retreated, the Shanghai Composite Index fell nearly 1.5% in the intraday, low to see 3013 points, the market decline narrowed, closing at 3026 points, down 1.09%; Shenzhen Component Index fell 2.53% . The GEM index fell below the 1700 mark, closing at 1693 points, plunging 4.49%, the biggest one-day drop in five months.
The turnover of the Shanghai and Shenzhen stock markets shrank, but the total still exceeded 1 trillion yuan, reaching 105.1 billion yuan, of which the Shanghai stock market was 451.2 billion yuan. However, foreign capital once again flowed out, with a net outflow of 1.978 billion yuan yesterday, of which the net outflow of Shenzhen Stock Connect was 1.72 billion yuan.
The industry sector closed almost across the board. Only a few sectors, including real estate, leasing, and Shanghai Free Trade, were stronger against the market. The telecommunications sector fell more than 5%, while the software and communications sectors also fell more than 4%.