On the first trading day of 2020, the beneficiary’s RRR cut and China-US mid-month signing of the first phase of the trade agreement, the mainland stock market welcomed the “starting point” yesterday
The Shanghai stock index closed up 1.15%, the highest in eight months, and approached 3100 points during the session. Significant volume of transactions between the two cities, nearly 100 stocks daily limit.
The analysis indicates that the People’s Bank of China has stepped up its policy to support the economy, and the China-US trade agreement has also made progress, boosting market confidence, and the market is expected to maintain an upward trend in the short term.
The People ’s Bank of China issued a “big red envelope” on the day of New Year ’s Day, announcing a full-scale reduction of 0.5 percentage points from January 6 (next Monday), and is expected to release more than 800 billion yuan. In addition, US President Trump said on Tuesday that it will be held on January 15 He signed the first-phase trade agreement with China at the White House. He will later travel to Beijing to start the second-phase trade agreement negotiation.
Net inflow of funds 10.1 billion
Favored by the news, the Shanghai and Shenzhen stock markets opened higher and higher yesterday. The Shanghai Stock Exchange index approached 3100 points and closed at 3085 points, up 1.15%. The Shenzhen Stock Exchange Index closed at 10638 points, up 1.99% to the highest since April 2019. The GEM Index closed up 1.93% to 1,832 points, the highest since May 2018.
The turnover of Shanghai and Shenzhen markets was 751.5 billion yuan, a significant increase of 218.8 billion yuan or 41.1% over New Year’s Eve, of which the Shanghai market was 327.2 billion yuan. The net inflow of northbound funds was 10.148 billion yuan, of which the net inflow of Shanghai Stock Connect was 5.045 billion yuan and the net inflow of Shenzhen Stock Connect was 5.103 billion yuan.
On the disk, the industry sector rose across the board, with communications services and media leading the gains, with semiconductors, electronics, and computers rising the most. Guizhou Moutai fell more than 5% in less than expected performance.
Institutions generally said that the RRR cut was in line with market expectations and reconfirmed the start of the Mainland’s wide currency cycle, which will benefit interest rate-sensitive sectors such as real estate and finance.
In addition, analysts believe that the RRR cut will lead to a slight decline in LPR (loan market quoted interest rate) quotes in January, reducing social financing costs.
If Chonggao falls, investors are warned
Looking ahead, Yan Kaiwen, an analyst at Huaxin Securities, pointed out that the news of the RRR cut and the upcoming US-China trade agreement are both good news, which will promote market sentiment. If the upward trend can last for about 3 days, the trend will be more certain. But he reminded that if the stock index declines or pulls back, investors need to be careful, the economy and performance are still uncertain.
Founder Securities said that the warm winter market continues and seize the time window to actively go long. Before the Spring Festival, pay attention to the varieties with low valuation and early cycle, and firmly believe in the growth style throughout the year 2020. After the RRR cut, financial, real estate, automotive, building materials and other industries with low valuations and related to the early economic cycle can be actively deployed.