It's crazy! The three major A-share indexes fell across the board, what is the r

  • 2024-07-06

Today, the A-share market appeared as if it had been painted with green oil paint, with a collective decline of varying degrees, truly a numbingly steep drop! Could all of this be the fault of the forced "pulling up of bank stocks"? This leads to a situation where retail investors lose money when the market rises, and suffer even greater losses when the market falls!

Especially today, the A-share market was hit by short-selling as soon as it opened, with major indices, sectors, and individual stocks falling unilaterally, turning the entire market green at the start; as the index's decline widened, the selling pressure within the market grew, and the downward momentum became stronger, thus a sudden sharp drop unfolded.

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Why the sudden drop? What are the reasons?

Many people would attribute today's sudden sharp drop in the A-share market to the aggressive pulling up of bank stocks by ultra-large capital, causing a siphoning effect on funds in the secondary market. However, this is not the case. The real reasons for the sudden drop are as follows:

Reason one: The A-share market was dragged down by the decline of major weighted sectors, with the most aggressive short-selling in the cyclical sector, where coal and shipping became the strongest bears. Additionally, oil, brewing, securities, and insurance sectors contributed to the decline, while banks stood out as the only ones supporting the market. However, this still could not reverse today's one-sided sharp drop trend, so the collective decline of weighted stocks is the main cause of the sudden drop.

Reason two: The A-share market suffered from the backlash of short-selling, due to the fact that the previous trading days provided time and opportunities for the bulls to push up, but the main force only aggressively pulled up bank and insurance stocks, suppressing the majority of other stocks from rising. Such a severely divided market is not well-received, and many investors, unable to play along, choose to admit defeat and exit, leading to a surge in those selling at a loss, which in turn creates strong selling pressure and allows the short-selling backlash to ferment, causing a sharp drop in the A-share market.

Reason three: The A-share market's own performance is indeed too weak, due to a lack of funds, confidence, popularity, and the downward trend of the A-share market not yet changing, among other unfavorable factors. We can only helplessly watch as the global stock market rises, with all markets celebrating, while the A-share market alone falls, and the continuous decline has become the norm for the A-share market. Therefore, for today's sharp drop in the A-share market, we can only blame the A-share market itself for being too weak.

Will it continue to fall tomorrow?Following today's one-sided plunge in the A-share market, the center of gravity of major indices has once again shifted downward, which is very unfavorable for the trend of A-shares tomorrow. It is certain that A-shares will continue to decline tomorrow.

It is predicted that A-shares will collectively open lower due to inertia tomorrow, and after the opening, pessimistic sentiment will spread, with more selling of "flesh-cutting" and risk-avoiding chips, dragging A-shares down again. However, considering the limited force of the selling pressure in the market and the role of the bulls in supporting the market, there is no need to be too pessimistic about the trend of A-shares tomorrow. A continued painful decline is inevitable, but it will not experience another one-sided plunge.

The meaning is that A-shares will fall tomorrow, but not by a large margin, and there is no need for excessive pessimism for the following reasons.

Firstly: A-shares are currently in a bottom area, and the back-and-forth fluctuations are to make the market suffer and allow for the switching of chips between high and low positions, definitely not for smashing the market. Therefore, the space for further decline is very limited.

Secondly: A-shares currently lack funds and popularity, so even if they fall again, they won't fall much. Similar to today's stock market, both markets still fell with reduced volume. As long as there is no significant capital pressure to smash the market, it is difficult to continue the downward killing.

Thirdly: The Shanghai Composite Index has already hit a new low of 2839 points last week, and it is highly likely that a historical bottom will form near this low point. Following today's decline, the strength and space for tomorrow's decline will not be significant.

In conclusion, through the above analysis, today's sudden decline in A-shares has been attributed by some to the forced lifting of bank stocks, while others believe it was the failure of a bullish breakout. Regardless of who is to blame, the fact that A-shares have turned green and fallen across the board today is undeniable. Ultimately, it is the inherent weakness and poor performance of A-shares that have led to today's decline, with other reasons being secondary.Please provide the text you would like translated into English.

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