A-share midday review | Multiple favorable news hits, ChiNext Index rises by 1.78% in half a day, agriculture and consumer sectors collectively rise

On April 8, A-shares rebounded in the morning session, with the Shanghai Composite Index returning to 3100 points. By midday close, the Shanghai Composite Index rose by 0.91%, the Shenzhen Component Index rose by 0.42%, and the ChiNext Index rose by 1.78%. In the Hong Kong stock market, the Hang Seng Index rose by 2%, the Hang Seng Tech Index rose by over 4%. In addition, the FTSE China A50 Index futures rose by over 4%. On the news front, multiple positive news came: 1. In the morning, the central bank, the China Banking and Insurance Regulatory Commission, and the China Investment Corporation all spoke out to maintain the stable operation of the capital market. 2. The day before, the China Investment Corporation, China National New Energy Group, and China Chengtong Holdings Group, three major state-owned enterprises, increased their holdings of ETFs, especially China Investment Corporation's actions were interpreted as the emergence of a "Chinese version of sovereign wealth fund." 3. Multiple A-share listed companies also announced plans to buy back shares, including companies such as China Merchants Group, Kweichow Moutai, and Contemporary Amperex Technology. On the market, stocks with "China" in their names collectively rose, with CRRC Corporation approaching the daily limit up; the consumer goods sector continued to rise, with retail, food, and baby products leading the gains, with stocks like Fujian Dongbai hitting the daily limit up; agricultural stocks remained active, with Xinjiang Sayram Modern Agriculture hitting the daily limit up for the third consecutive day; the defense industry sector rose, with Chengdu Screen Microelectronics rising by over 10%; in addition, sectors such as semiconductors, pharmaceuticals, coal, and power led the gains; on the downside, industrial metals fluctuated lower, with North Copper hitting the daily limit down and auto chain and consumer electronics sectors leading the declines. It is worth mentioning that several broad-based ETFs saw significant trading volumes, with the turnover of the CSI 500 ETF exceeding 6.3 billion, and the turnover of the Southern CSI 1000 ETF, Huaxia CSI 1000 ETF, GF CSI 1000 ETF, and Fortune CSI 1000 ETF exceeding 1 billion, all exceeding the full-day turnover of the previous day. Looking ahead, EB Securities believes that the timely increase in holdings by the China Investment Corporation further implements the directive of the decision-making level to maintain the stability of the financial market, fully demonstrating the determination of the regulatory authorities to maintain the stable operation of the capital market and guide the entry of medium and long-term funds into the market, which can be described as the "Chinese version of the sovereign wealth fund." With the recovery of market sentiment, the A-share market is expected to gradually overcome short-term disturbances and return to a rational track reflecting the gradually improving domestic economic fundamentals.The stable indicators fully demonstrate the regulatory authorities' determination to maintain the stable operation of the capital market and guide the entry of medium and long-term funds into the market, which can be described as the "Chinese version of a sovereign wealth fund." This increase in holdings by CIC will effectively consolidate market consensus, encourage investors to focus on long-term value amidst short-term fluctuations, and inject sustained momentum into the high-quality development of the capital market. With the rebound of market sentiment, the A-share market is expected to gradually move away from short-term disturbances and return to a rational trajectory reflecting the gradual improvement of the domestic economic fundamentals.3. Huaan: Emotional release type sharp decline is not sustainable Huaan pointed out that the sharp decline in A-shares on Monday was accompanied by obvious emotional release, and the decline basically matched the overall decline in the peripheral markets after the announcement of equal tariffs. Therefore, the pessimistic sentiment in the market on Monday has been largely released. Stability measures have been implemented, and trade hedging policies are expected to be accelerated, so there is no need to be pessimistic about the current position of A-shares. In terms of direction, it is recommended to continue looking for opportunities along the direction of "previous stagnation, undervaluation combined with potential catalysts". 4. Orient: Limited downside space in the market, strong support near 3000 points for short-term Shanghai Composite Index Orient pointed out that generally, when panic sentiment appears in the market, stock ETFs will show the characteristic of being a "contrarian indicator". Institutional super funds will buy more as stock ETFs fall, which is beneficial for market sentiment recovery, and short-term risk appetite is expected to improve. From a technical standpoint, taking the CSI 300 Index as an example, the overall market fell below the lower boundary of the box since September 27 last year for the first time, and also filled the gap between the high openings of September 27 and September 30 for the first time. Obviously, in a general decline pattern, emotional factors are clearly dominant over logical factors, and the market is still dominated by emotional negative feedback, with a high probability of the stock index continuing to explore the downside trend. However, considering the potential positive factors at the policy level, the downside space is limited, and the Shanghai Composite Index has strong support near 3000 points in the short term.