A-shares exploded. What happened?

　　On the last trading day of November, A-shares suddenly rose strongly and became a hot topic on Weibo!

　　Against the backdrop of weakening Asia-Pacific stock markets, the A-share market has seen a major counterattack. As of midday close, the Shanghai Composite Index rose 1.59%, the ChiNext Index rose 3.83%, the Shenzhen Component Index rose 2.41%, and more than 4,500 stocks rose in the three cities of Shanghai, Shenzhen, and Beijing. At the same time, Hong Kong stocks also improved. The Hang Seng Technology Index rose more than 2%. MSCI China A50 Connectivity Index Futures and FTSE China A50 Index Futures rose more than 2%.

　　Image source: Pexels

A-shares surge as consumer goods strengthen

　　On the morning of November 29, after a slight fluctuation, A-shares suddenly rose. The ChiNext Index rose by more than 4% at one point. Individual stocks showed a general rise, with more than 4,500 stocks in Shanghai, Shenzhen, and Beijing rising, and a half-day transaction of 992.8 billion yuan in the morning. At the midday close, the Shanghai Composite Index rose by 1.59%, the Shenzhen Component Index rose by 2.41%, and the ChiNext Index rose by 3.83%.

　　The value style returned. Driven by financial technology, the Shanghai Composite Index rose sharply and then fell back briefly. The consumer sector took the lead and the Shanghai Composite Index rose rapidly. The large consumer track was strong, with food and beverage, retail, and clothing leading the gains. Yiming Foods rose for four consecutive days, and Yonghui Supermarket, Guofang Group, Jiahe Food, JuneYao Health, Maiqiu'er, and Septwolves all closed at the daily limit.

　　Nearly 4,500 stocks rose in Shanghai, Shenzhen and Beijing. Financial stocks such as securities companies and banks fluctuated and strengthened. Jinlong shares rose for four consecutive days, Guosheng Financial Holdings rose by the daily limit, Huaxia Bank, Zheshang Securities, Dongfang Fortune, Pacific Securities, and other stocks rose the most. Stock trading software concept stocks were active, Dazhihui rose by the daily limit, and Flush rose by more than 8%. The A50 rose sharply. MSCI China A50 Connectivity Index Futures and FTSE China A50 Index Futures rose by more than 2%.

What caused the outbreak？

　　Analysts believe that the market surge may be related to the recent plunge in the U.S. dollar and U.S. bond yields. On the other hand, it may also be related to the market's expectations for the important meeting.

　　Guosheng Securities believes that the profit of industrial enterprises in October was more good than bad, with the year-on-year decline narrowing to -10% (previous value -27.1%), and the month-on-month increase of 11.2%, a record high in the past 10 years, mainly due to the low base in September and the effect of incremental policies.

　　In the short term, we should pay attention to the tone set by the Central Economic Work Conference in December for next year, especially the possible measures to “stabilize prices” and the possible production restrictions on mid- and upper-stream raw materials.

　　Wanlian Securities said that the current sentiment of investors in the A-share market is in the repair stage, and the effects of policies such as boosting market confidence and attracting medium- and long-term funds into the market are further evident. However, the price-earnings ratios of most industries are still below the historical average level and have the potential for repair.

　　It is recommended to pay attention to the continued expansion and allocation opportunities of passive index funds; the Central Economic Work Conference is about to be held, and large-cap blue chips may benefit relatively; and the sub-sectors of the technology growth sector that have achieved technological breakthroughs and expected demand expansion.