A-shares all rise. How will the three major events go in the super week?

　　The super week is gradually coming to an end, and three major events are about to be announced, and A-shares are once again booming.

　　On November 7, the three major stock indexes opened lower and moved higher. In the afternoon, they collectively soared by more than 2% due to the outbreak of the financial and consumer sectors. Among them, the Shanghai Composite Index rose by 2.57%, the Shenzhen Composite Index rose by 2.44%, and the Growth Enterprise Market Index rose by more than 3%, reaching 3.75%.

　　A chief strategist of a brokerage analyzed to The Paper reporter that the positive trend of the market on Thursday was due to three factors. First, after overseas-related events came to light, the main line of the market was switched on the market, the market's money-making effect was highlighted, and the bullish atmosphere was strong. The second is the market‘s positive expectations for the incremental policies of the National People’s Congress Standing Committee. The third is the positive stance of regulatory authorities in the news.

　　Looking forward to the market outlook, with the U.S. election, the Federal Reserves interest rate discussion, and the implementation of incremental domestic policy reviews, how will A-shares perform during a period of intensive domestic and foreign events？

　　Another market analyst believes that technically, the market rose sharply on Thursday, with the Shanghai stock market increasing its volume and the Shenzhen stock market shrinking its volume. Regardless of changes in volume and energy or switching between high and low, the main battleground for funds is expected to shift to the Shanghai stock market. The short-term market continues to rise and continues to challenge 3674 points.

　　Image source: Pexels

How three major events affect A-shares

　　Data show that as of the close on November 7, the Shanghai Composite Index rose 2.57% to 3,470.66 points; the Shenzhen Component Index rose 2.44% to 11,235.92 points; the GEM Index rose 3.75% to 2,350.76 points.

　　Thursday's sharp rise, market analysts said, was mainly due to the increase in the market's money-making effect, positive policy expectations, and stimulation from the news.

　　In terms of market performance, brokerage stocks set off a trend of daily limit rises on Thursday, with CITIC Securities, CITIC Construction Investment, Beijing Capital Securities, and many other brokerage stocks hitting their daily limit, and insurance stocks also led the gains. In terms of consumption, real estate has led the list of gains, and consumer stocks such as liquor and retail have rebounded.

　　Zheng Xiaoxia, deputy director and chief economist of Hua'an Securities Research Institute, said that the overall market rose sharply on Thursday, and the style followed the trend and switched from the main line of the early growth technology market to “internal circulation”, finance, and consumption. On the one hand, growth technology transactions are overheated, and the main line of the market has switched to “internal circulation.” On the other hand, after overseas-related events became clear, the market's expectations for domestic policies to increase “internal circulation” fermented.

　　In terms of policy expectations, Zheng Xiaoxia said that the important catalysts for Thursday's surge in consumption and real estate are the market's growing expectations for the policies of the National People's Congress Standing Committee, especially the real estate support and consumption support policies, and the market's expectations for policies that may be implemented are getting higher and higher. As well as debt reduction, real estate, and consumption support policy.

　　On the news, Luo Zhiheng, chief economist and director of the research institute of Guangdong Securities, said that in terms of macroeconomics, if Trump is elected, it may have a certain impact on China‘s exports in the short term. Harris will continue the Biden administration’s trade policies, which will have a relatively small impact on Chinas exports. Overall, continued interest rate cuts are the consensus expectation of the market.

How will A-shares trend during the super week？

　　As the three major events of “Super Week” continue to become clearer, what will be the performance of A-shares next？

　　Zheng Xiaoxia predicts that the gradual implementation of the three recent major events will be accompanied by the repair and correction process of market expectations. After the results of the three recent major events are clear, the probability of the market direction fluctuating upward in the medium term is still high. First, the effectiveness of early policies has appeared and economic fundamentals have shown signs of improvement. Second, the market's focus will shift to next year's economic situation and policy intensity, and the market is more likely to have optimistic expectations.

　　Zhao Wei said that the market rose sharply on Thursday. The Shanghai stock market increased its volume while the Shenzhen stock market shrunk. The main battlefield of funds is expected to shift to the Shanghai stock market. It is similar to the characteristics of the market in November 2014. The short-term market will continue to rise and challenge 3674 points.

　　In terms of allocation, Zheng Xiaoxia recommends choosing technology directions with more catalysts and some consumer goods with a boom or potential policy support and the logic of supplementary growth, such as automobiles, home appliances, medicine, agriculture, and animal husbandry. Zhao Wei suggested that on dips, focus on smart grid, new energy, chips, bottom-compensating stocks, etc., and avoid early strong stocks.