A Remarkable Turnaround in A-shares!

Advertisements

The A-share market on February 19, 2025, felt like a rollercoaster ride for investors! Just yesterday, the scene was grim, with all three major indices closing in the red – the ChiNext and Beijing Stock Exchange dropping more than 2%. More than 4,600 companies saw their stock prices decline, leaving many investors disheartenedHowever, in a twist of fate, today witnessed an incredible turnaround: all three major indices rallied in the morning session, with the ChiNext and Beijing Stock Exchange climbing over 1.5%. Almost 4,000 stocks were on the rise, leaving investors thrilled yet anxious; could the upward trend continue in the afternoon? Was the market truly stabilizing this time?

Let’s first look at how the morning session unfoldedThe Shanghai Composite Index rose by 0.52%, while the ChiNext and Beijing Stock Exchange registered gains of 1.54% and 1.49% respectivelyThe total trading volume across both markets reached 1.0283 trillion yuan, only 10 billion higher than the previous trading day, yet net capital inflow stood at a significant 916 million yuanAfter a major plunge the previous day, the rebound seen today was remarkable—especially for the ChiNext, which saw intraday gains surpassing 2%. However, the phenomenon of rising prices on shrinking volumes left some analysts puzzledCommon market wisdom dictates that “volume precedes price,” leading many to question whether the momentum could be sustained amid this lack of volume.

Overall market conditions illustrated a robust recovery: 4,060 stocks rose while 1,109 fell, with 62 hitting their upper limits and only 2 on the lower limitsA total of 255 stocks increased by more than 5%, while just 10 saw falls of more than 5%, leading to an average stock price gain of 1.83%. This scenario significantly improved the market's overall profitabilityConcurrently, the Hang Seng Index and A50 futures also showed a bounce back, positively influencing the A-share market

Advertisements

The Hang Seng Index had a rocky start, dipping 1.5% in the morning before a remarkable recovery, eventually closing up 0.8%. Similarly, the A50 futures climbed 1.2% after an initial dropSuch strong rebounds in both indices ignited momentum in the securities sector, which is often seen as a market bellwether, fueling bullish sentiment across the boardRiding this wave, the ChiNext and Beijing Stock Exchange surged ahead, contributing to a notable counterattack.

The rotation of sectors was quite intriguingYesterday's losers, such as the Tech 50, chips, education, software, AI, gaming, and media sectors saw gains todayFor instance, the chip sector, which dropped by 3.5% yesterday, rebounded by 2.8% todayThis turnaround was primarily driven by positive news within the semiconductor industry, with forecasts suggesting a resurgence in global chip demand in the latter half of the year, and domestic companies achieving new breakthroughs in technologyOn the flip side, sectors that had fared well previously—like power generation, coal, and livestock—experienced declinesFor example, the energy sector witnessed a 1.2% rise yesterday but dropped 1.5% today, reflecting a shift in investor sentiment from defensive to aggressive sectors as appetite for risk increasedThe rapid ebb and flow between these highs and lows in sectors can leave investors scrambling and heightens the challenge of navigating the market.

Now, turning to the pressing question on everyone’s minds: how would the market perform in the afternoon? Following the morning rebound, the indices approached their midday highs before retreating, leaving many investors feeling uneasyGiven the current landscape, the afternoon session likely faced a reversal, with targets hovering around the 3,305-point mark, suggesting a day dominated by movements of upper shadow candles, indicating persistent volatilityIt’s crucial to recognize that we are currently engaged in a game of existing funds, with no significant influx of new capital entering the fray—this results in a limited capacity for all sectors to rise simultaneously

Advertisements

Advertisements

Advertisements

Advertisements

Leave a Reply

Your email address will not be published. Required fields are marked *