A-share midday review | Risk aversion sentiment spreads, global assets plummet! Shanghai index falls below 3900, lithium carbonate concept plunges

On November 21st, the index opened low and continued to adjust. By the midday closing, the Shanghai Composite Index fell by 1.88%, below 3900 points, while the Shenzhen Component Index fell by 2.72% and the ChiNext Index fell by 3.18%. Stocks in both markets fell, with nearly 5000 stocks declining; the total trading volume in the two markets reached 1.31 trillion yuan in the first half of the day, an increase of 197.5 billion yuan from the previous day. Risk aversion sentiment in the market continued to ferment, following the trend of the US stock market overnight. The Asia-Pacific markets collectively declined today, with stock markets in Japan and South Korea opening low and falling. The Seoul Composite Index in South Korea fell by 4%, while the Nikkei 225 Index fell by over 2%. On the news front, the latest release of US non-farm payroll data did not provide clear information on the outlook for interest rates. Despite Nvidia's impressive financial report, investors continued to sell off high-risk assets. The minutes of the Federal Reserve's monetary policy meeting showed that there was a significant difference among officials on whether to continue cutting interest rates in December. In terms of the market, short-term sentiment plummeted, and weighted sectors collectively fell. The forestry sector bucked the trend and rose, with the soybean sector active. In the livestock sector, Cnfc Overseas Fisheries rose for the sixth consecutive day, and Zoneco Group hit the daily limit up. In the shipbuilding sector, there was an abnormal surge, led by Hubei Jiuzhiyang Infrared System. In the AI application concept, there was a high and then a fall, with H&R Century Union Corporation hitting the daily limit up. Banking stocks rose briefly during trading, with Bank Of China hitting a new historical high again. In terms of declines, the lithium resources and energy metals sectors saw substantial pullbacks, with many stocks hitting the limit down. The solid-state battery sector led the declines, with many concept stocks hitting the limit down. The photovoltaic and organic silicon sectors saw declines, and the storage chip sector plummeted, with many stocks hitting the limit down. In the hardware sector, including light modules, PCB, and copper cable high-speed connectors, stocks declined. Sectors like power grid equipment, consumer electronics, minor metals, and oil services all saw comprehensive declines. In terms of individual stocks, the resumption of trading of the two major stocks, Strait Innovation Internet and Zhongfu Straits, caused a huge commotion. They both opened with large declines, with Strait Innovation Internet dropping by 17% at one point. However, Zhongfu Straits saw a turnaround with a rise. Looking ahead, DeBang Securities stated that the market style continues to be cautious, with expectations of a downward trend in Federal Reserve interest rate cuts and tensions in Sino-Japanese relations affecting the market. They believe that the short-term market may continue a pattern of "weighted support+ structural themes" volatility. Popular Sectors 1. The rise of the AI application concept The AI application concept rose, with H&R Century Union Corporation hitting the daily limit up. Stocks like Easy Click Worldwide Network Technology and Ronshin Group led the gains. 2. The active agricultural sector The agricultural sector was active, with Winall Hi-tech Seed hitting the daily limit up. Stocks like QIULE SEEDS and China Agriculture Development Seed Group followed suit. Institutional views 1. Zheshang: Maintain a neutral optimistic attitude towards the market, focusing on cyclical and technological growth Zheshang believes that the Shanghai Composite Index is currently in the third wave since February 2024. Considering factors such as the international situation, economic cycle, domestic policies, fund flows, market sentiment, and valuation, they maintain a neutral optimistic attitude towards the market. They believe that the current "systematic 'slow' bull" trend is running smoothly. In terms of style, they recommend a balanced approach focusing on cyclical and technological growth, with a benchmark in mind. Industries to focus on include consumer, cyclical, traditional industries, and dividend sectors. In terms of thematic investment, they suggest focusing on "technology + domestic demand" and highlight seven directions including AI computing power, Siasun Robot & Automation, solid-state batteries, lithography machines, controllable nuclear fusion and deep-sea technology, and silver economy. 2. Huaxi: In the second half of November, with a lack of macroeconomic catalysts, the willingness for policy negotiation is gradually increasing Huaxi believes that the trend of changing positions is gradually coming to an end, and the short-term attractiveness of the index is becoming apparent. Today's market opened high and then fell, with initial optimism driven by Nvidia's better-than-expected performance and the positive news of brokerage mergers. However, the optimism was short-lived as the market continued to decline, with major indices turning green. It is worth noting that while the optimistic sentiment was disrupted, there was not a corresponding increase in volume, and trading remained light compared to the previous day. The main reason for this is that in the changing market sentiment since November, active capital has been exchanged, and trading interest has diminished, reflected in the decrease in the turnover rate from 1.94% on November 18 to 1.70% today. In this situation, the downward space for the index is limited and it is more likely to be pushed for a rebound. Considering that the macroeconomic window in November has almost reached its second half, the willingness for policy negotiation is expected to gradually increase, which could benefit service consumption, real estate, and other sectors with a phase-based market. 3. DeBang Securities: The market style continues to be cautious, focusing on future domestic and international economic data DeBang Securities believes that the market style remains cautious, with a focus on future domestic and international economic data. Recent market weakness are influenced by decreasing expectations of Federal Reserve interest rate cuts and tensions in Sino-Japanese relations affecting the market. They believe that in the short term, the market may continue a pattern of "weighted support + structural themes" volatility. They recommend defensive positioning in undervalued financial stocks such as insurance and banks; industrial sectors like lithium mining may have some upward elasticity driven by orders and prices; event-driven themes like aquaculture may maintain some heat in the short term, but caution should be exercised due to the risk of a significant pullback after large gains. In the coming period, they suggest focusing on manufacturing PMI in November and the Federal Reserve's December interest rate meeting. If the PMI remains weak, the market may focus further on policy-driven defensive sectors, while a sharper-than-expected decline in US core PCE inflation could lead to an increase in expectations of Federal Reserve interest rate cuts and alleviate the pressure of foreign capital outflows from A-shares. This article is a translation taken from "Tencent Self-selected Stocks". GMTEight Editor: Wang Qiujia.