It has been more than a month since the beginning of 2024, but the stock market's downturn has not eased and has intensified instead. On February 5th, a rare spectacle of thousands of stocks hitting their stop-loss limits unfolded, with less than 1% of the stocks rising while the rest experienced varying degrees of decline, leaving the market in gloom.
Looking at the major sectors, only the banking sector saw an overall upturn, with the remaining sectors experiencing varying degrees of decline. Two-thirds of the stocks in the banking sector showed a counter-trend rise, with CITIC Bank having the highest gain at 4.93%, followed closely by Bank of Ningbo and ICBC.
This round of increases in the banking sector was largely influenced by new announcements. On February 5th, a new round of reserve requirement ratio cuts was officially implemented. The People's Bank of China reduced the reserve requirement ratio by 0.5 percentage points, providing long-term liquidity of about 1 trillion yuan to the market. This series of policies made the banking sector's prospects look favorable, thus leading to a counter-trend rise.
Apart from banking, transportation-related sectors such as airport and seaport shipping, and road and rail transport were relatively better off. Though also in overall decline, these sectors could be said to have both ups and downs. The transportation sector saw a rise influenced by the recent Spring Festival travel rush, a normal occurrence, and this trend might continue for a while.
Besides banking, another sector closely related to finance also saw a significant rise, second only to the banking sector, that is the securities sector.
Everbright Securities saw a significant rise of 6.94% and is still climbing, followed by First Capital Securities with a gain of over 4%, with other securities stocks like China Merchants Securities, CITIC Securities, and Shenwan Hongyuan Group also experiencing various degrees of increase.
After announcing "a provision for asset impairment of 669 million yuan for the year 2023, reducing net profit by about 640 million yuan" in the previous days, Everbright Securities experienced a series of declines before finally achieving a turnaround today.
Having discussed the sectors that are rising against the trend, let's look at the ones that are following it with a decline. Apart from the "regulars" like the real estate and education sectors, the electronics industry also experienced a significant drop.
It could be said that the stock market today is still bleak. Investors are advised to carefully consider their risk tolerance, whether to withstand the pressure and hold on or to cut losses and exit early, based on their individual situations.
