Epic Surge and Shocking Dive: A Historic Day in China's A-Share Market
China's A-shares, after experiencing a continuous surge before the National Day holiday and a 7-day vacation that was hard to endure for stock investors, finally opened on October 8th amid great anticipation.
However, the market trend on this day was different from what many had anticipated, and it could even be said to be full of dramatic twists.
Many leading financial and mainstream media outlets were still hyping up the "epic surge" in the stock market on October 8th early in the morning, but before the enthusiasm could fully brew, a fierce plunge occurred.
The A-share market's performance was somewhat unexpected. By the midday closing, the market had experienced tremendous volatility.
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However, the outcome was still favorable:
On October 8th, by the end of the trading day, the Shanghai Composite Index closed at 3489.78 points, up 4.59%, the Shenzhen Component Index closed at 11495.10 points, up 9.17%, and the ChiNext Index closed at 2550.28 points, up 17.25%.
Today, the Shanghai and Shenzhen stock markets traded a total of 3.49 trillion yuan (Shanghai market 1.51 trillion yuan, Shenzhen market 1.94 trillion yuan), a significant increase of 33.40% compared to the previous trading day's 2.61 trillion yuan (Shanghai market 1.17 trillion yuan, Shenzhen market 1.43 trillion yuan).
The ratio of rising to falling stocks in all traded stocks in the Shanghai and Shenzhen markets was 5029:291, with an overall market profit effect of 94.53%.
It has to be said that under the influence of expectations and emotions, the market trend that China's stock market exhibited on October 8th, a day filled with anticipation, was far from as simple as the dramatic scene that was visibly presented.On the first trading day following the National Day holiday, a magical surge and a bizarre dive occurred simultaneously. What was the situation?
On October 8th, the market opened with a limit-up, reflecting the bullish sentiment of everyone during the 7-day holiday.
However, there was no "thousands of stocks limit-up", nor was there a "market opens and closes at the same time", but rather a high opening followed by a low walk, with violent fluctuations.
The bullish sentiment in the market stemmed from the cumulative increase of over 11% in Hong Kong stocks during the holiday, and the cumulative increase of 14% in the FTSE A50.
The A-share market fluctuated greatly in the morning, and many stock investors may have been dazzled by the fluctuations. Here is a detailed review for everyone:
On the first trading day of October, the A-share market started with a red opening. The Shanghai Composite Index, the CSI 300 Index, and the ChiNext Index opened with increases of 10.13%, 10.76%, and 18.44%, respectively. Among them, the Shanghai Composite Index and the CSI 300 Index both set the largest opening increase since 2000, while the ChiNext Index set the largest opening increase in history. The Beijing Stock Exchange 50 Index opened with an increase of 26.67%, also setting the largest opening increase in history.
The three major stock indices collectively opened high, with the Shanghai Composite Index opening at 3674.4 points, up 10.13%, the Shenzhen Component Index opening at 11864.11 points, up 12.67%, and the ChiNext Index opening at 2576.22 points, up 18.44%.
Nearly a thousand stocks were limit-up in the auction. The STAR Market market-making stocks, MLOps concept, and the registration system new stock sector led the increase.
On the market, a total of 5329 stocks were red at the opening today, with 941 limit-up stocks and 3237 stocks with an increase of more than 10%, all at historical highest levels.
The morning market can be divided into two stages, the first stage is from 9:30 to 10:40.Due to the outstanding performance of the Hong Kong stocks and A50 futures during the holiday, all major stock indices hit the upper limit at the opening at 9:30, with most industry leaders sealing a one-word board. If large funds hold their positions and do not sell, the market is bound to rise with reduced volume today.
However, domestic institutions started the "mindless selling" mode immediately after the opening. As shown in the figure below, the main force funds sold nearly 180 billion yuan in the early morning, and it was basically concentrated before 10:40, so the market has been falling all the way after the opening.
At 10:40, the Shanghai Stock Index had fallen to around 3370 points, a drop of more than 8% from the opening price of 3674 points.
This is a very exaggerated decline, and the main force funds also stopped the large-scale selling, otherwise the market might really replicate last year's "828 tragedy".
Between 10:40 and 11:30, the bullish forces regained the upper hand, and the whole city entered the second stage of shock rebound.
It is worth noting that on October 8th, within 20 minutes after the opening, the A-share turnover exceeded 1 trillion yuan, an increase of more than 240 billion yuan compared to the previous trading day at this time, setting a new record for the fastest trillion yuan in history. As of 10:44, the A-share turnover exceeded 2 trillion yuan.
Due to the extremely hot trading, the trading systems of many securities firms have once again experienced abnormal situations. Users who have opened accounts with securities firms such as CITIC Securities, Ping An Securities, and China Merchants Securities have reported that trading and market display have been sluggish. Many users of different securities firms have reported that the bank-securities transfer function is sluggish and cannot be operated, and money cannot be transferred in and out.
When investors log in to the Tonghuashun trading system, it displays "the background is busy, the request is canceled, please try again later".
The Futu trading software focused on the Hong Kong stock market also experienced a malfunction, among which the industry heat map cannot be displayed.
Source of the picture: NetworkThe A-share market trend on October 8th was definitely surprising.
Although the overall market ended with a rise, what does it mean by "bull market can easily lead to big losses"? Today's market taught a lesson to new investors.
Despite more than 5,000 companies rising across the market, the short-term situation can be described as perilous—
At 9:30, there were as many as 942 companies hitting the upper limit, which means the market's upper limit rate exceeded 17%;
At 10:40, the number of companies hitting the upper limit dropped to only 50;
By the end of the day, with sentiment warming up, as of 15:00, there were 791 companies that truly hit the upper limit.
For those investors (likely new investors) who were eagerly looking forward to a bull market during the holiday and blindly increased their positions at the opening, today might be the day when chasing high is most likely to get trapped in this major rebound trend.
What everyone needs to be more vigilant about is:
If your own funds are trapped, you can pay the tuition for the next trading day and leave.
But what if you use leverage and accidentally get a margin call?From a short-term perspective, the reason for being trapped is quite simple—buying those "second-tier" stocks that are not firmly boarded and experience a significant drop after disagreement. Some software statistics show that there are hundreds of stocks that meet the "sharp pullback" criteria during the trading session.
Some stocks, even if they are not second-tier, are difficult to grasp in terms of their trend.
The most typical example is three newly listed stocks with "C" at the beginning, which all experienced a cliff-like dive in the morning, with a daily fluctuation of more than 90%.
Take C Hehe, which reached a peak of 507 yuan during the trading session, as an example. Wind data shows that at 9:41 AM, 4,215 shares of this stock were traded at 507 yuan, meaning that approximately 213 million yuan of funds were taken over at the peak.
After the temporary suspension ended, the stock dived straight down, falling to the lowest point of 270 yuan at 9:44 AM, triggering a temporary suspension downward. That is to say, the funds that entered at the high point experienced the taste of being "halved" in just 3 minutes, and they were unable to recover at the end of the trading session.
Of course, on the contrary, the funds that bottom-fished at 270-280 yuan ended up making a fortune.
There are many similar situations today, so they will not be listed one by one.
New investors and funds who were stimulated by the market before the holiday and raised money during the holiday, and rushed in at the first trading day after the holiday, were basically all trapped.
The market plunged into the previous trading dense area, with a large amount of trapped chips accumulated between 3,400 and 3,700 points.The matter at hand is just that—a matter with evidence and clear logic, making it easy to understand at a glance.
Behind the massive volume lies a sharp drop, reflecting what key signals and possible changes?
On the first trading day after the holiday, the A-shares experienced a sharp correction, with panic emotions beginning to brew during the trading session.
From a thousand stocks hitting their upper limits to over 200 stocks reaching their peak, various strong stocks started to open their upper limit boards, while weak stocks began to turn downwards, and the stock index fell by 300 points within an hour.
The good news is that after the brief dip, the market quickly stopped falling and stabilized, with trading volume continuing to increase.
This indicates that there is an active influx of funds, and most funds are still optimistic about the future market.
It is worth noting that on October 8th, the trading volume performance was particularly noteworthy.
The Shanghai and Shenzhen markets traded a total of 3.49 trillion yuan (Shanghai market 1.51 trillion yuan, Shenzhen market 1.94 trillion yuan), a significant increase of 33.40% compared to the previous trading day's 2.61 trillion yuan (Shanghai market 1.17 trillion yuan, Shenzhen market 1.43 trillion yuan).
With high expectations and heated emotions, the market experienced intense fluctuations. Is this a market correction to allow more people to get on board, or has the bull market come to an end?Friends who understand the current macroeconomic predicament are aware of one thing: frantic monetary policies can only heat up the capital markets, but whether the capital markets can continue depends on two key factors:
1. Whether the economy can recover;
2. Whether subsequent reforms can keep up.
The perfect plan would be for monetary policy to heat up expectations, economic growth to fill confidence, and deepening reforms to open up future space, with each stage connecting to each other, creating an opportunity period that lasts for N years.
On the contrary, if the economy does not recover and reforms do not keep up, then this bull market is a mad bull, a so-called game of hot potato, where the game is all about speed.
This means that after a sharp rise, there must be a sharp fall.
Moreover, today's domestic main funds have a terrifying net outflow of 214.8 billion, and no matter how much the market rises, domestic funds sell a little when it rises a little, and sell a lot when it rises a lot. What is this all about, openly singing counter to the higher-ups.
As for the main reasons behind today's high opening and low closing of the market, I personally think there are the following:
1. There are signs that the official has given the market to cool down and control the rhythm.
2. On the morning of October 8th, the highly anticipated press conference, which was expected to be full of expectations, gave a signal that was lower than the market expectation.3. Securities firms and institutions are obviously cashing out by selling off their holdings and engaging in high-selling and low-buying operations.
There is no need to elaborate on institutions; the market trends are the result of buying and selling activities. It is not a new phenomenon that domestic Chinese institutions are spineless and cannot afford losses.
Regardless of whether the market is good or bad, institutional funds with absolute pricing power are always keen on "mowing the leeks" (a term used to describe the practice of taking advantage of inexperienced investors).
The key lies in the subtle yet critical changes in the country's attitude and policy expressions, which deserve attention.
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