Market Insights: April 2nd, 2024

A-share Market:

• On Tuesday, the A-share market exhibited a trend of volatility and decline, with the GEM (Growth Enterprise Market) index plummeting by more than 1%. The main indices of both the Shanghai and Shenzhen stock exchanges also saw declines, with the Shanghai Composite Index falling by 0.22% and the Shenzhen Component Index by 0.95%.
• In terms of sectors, industries such as wind power equipment, titanium dioxide, oil and gas, and non-ferrous metals were relatively strong performers, leading the gains; while sectors like AIGC, game media, and humanoid robots were among those with the largest declines.
• More than 3,500 stocks across the market declined, while northbound funds also exhibited a net selling status, with the net outflow reaching 2.7 billion yuan.

Hong Kong Stock Market:

• The Hong Kong stock market was relatively lively on the day, with the Hang Seng Index rising by 2.45% and the Hang Seng Tech Index also up by 2.13%.
• Oil stocks were a hot spot in the Hong Kong market, with strong performances from stocks such as PetroChina, CNOOC, and Sinopec.
• Additionally, holiday concept stocks in the Hong Kong market also garnered market attention, with significant gains in stocks like Trip.com Group.

Individual Stock Performance:

• Xiaomi Corporation was a highlight of the stock market that day, with its share price rising by more than 11%, surging by up to 15% at the opening, marking the largest intraday gain since March 2022.
• Xiaomi's car model SU7 had an impressive debut, securing nearly 88,898 orders within just 24 hours, and the Founder Edition sold out quickly during the second round of sales.
• Goldman Sachs released a report stating that the performance of Xiaomi Group's newly launched first electric vehicle, the SU7, exceeded expectations. The report gave a high rating and adjusted its target price from the previous HK$18.9 to HK$20.

U.S. Economy:

• The unexpected expansion of the U.S. ISM Manufacturing Index caused bond traders to cool their expectations for the Federal Reserve's monetary policy, with the probability of a rate cut in June falling below 50%. However, the expected magnitude of the rate cut was reduced. Despite improvements in manufacturing data, the rapid price increases are being passed on to consumers.
• The extent of the Fed's rate cuts for the year in the swap contract pricing has also fallen to less than 65 basis points, below the forecast of Federal Reserve policymakers (75 basis points).

International Crude Oil Market:

• In the international crude oil market, OPEC+'s production cut policy has created new demand for U.S. oil, leading to a surge in exports from the U.S. to Europe and Asia.
• According to data from the oil tracking company Kpler, U.S. exports to India are expected to jump to the highest point in nearly a year in March.

South Korean Parliamentary Election:

• On March 31st, South Korea's Ministry of Public Administration and Security released data on the 22nd parliamentary election. As of March 29th, the total number of voters who participated reached 44.251919 million, with those aged 50 and above accounting for more than half.

China's Monetary Policy:

• On April 1st, the People's Bank of China (PBC) carried out a 20 billion yuan 7-day reverse repo operation through interest rate bids, to maintain reasonable and ample liquidity in the banking system. The operation rate was kept unchanged at 1.8%.
• At the same time, the PBC realized a net withdrawal of 480 billion yuan in the open market, aimed at offsetting the impact of the 500 billion yuan reverse repo expiration, to maintain liquidity stability at the end of the quarter.