The three major shocks in A-shares arrive suddenly! Three major uncertainties are emerging!

Global Stock Markets Make a Major Rebound!

In the early trading session, Asia-Pacific stock markets continued the strong rally from last Friday’s U.S. stock market surge. The Shanghai Composite Index rose over 50 points at one point, the ChiNext Index increased by more than 2%, and the Shenzhen Component Index gained over 1.5%. Leading sectors included photovoltaics, film and television, computing hardware, and chemicals. Over 4,500 stocks in the Shanghai, Shenzhen, and Beijing markets rose.

From a structural perspective, three main driving factors are emerging: First, Nvidia’s big rebound last Friday sparked a rally in AI-related sectors; second, Tesla is evaluating multiple locations in the U.S. and plans to expand its solar cell manufacturing business, boosting the solar energy sector; third, Hong Kong’s property stocks continued to soar, lifting the A-share real estate sector.

So, are there still uncertainties in the market?

Collective Major Rebound

AI application stocks surged at the open, with Rongxin Culture, Chinese Online, iReader Technology, Haikan Co., and Fengyu Zhu hitting the daily limit, while Hongke Technology rose over 10%. Meanwhile, computing hardware stocks like CPO continued their strong momentum, with Tanfeng Communication soaring nearly 10%, hitting a new historical high. Stocks such as Tiantong Co., Zhilifang, Taichen Optoelectronics, and Jepte also opened high.

Research from Kaiyuan Securities states that ByteDance’s new platform launched Seedance2.0 video generation model, sparking widespread evaluation and discussion within the AI industry, with impressive real-world results. Additionally, Nvidia’s nearly 8% surge last Friday helped reverse previous market pessimism about AI.

Photovoltaics are even more explosive, with Jinjing Technology hitting the daily limit, Juhua Materials rising over 10%, and GCL System Integration, Liancheng CNC, Autowell, Junda Co., and Jinko Energy following suit. Elon Musk “led the charge” across the entire sector. Reports indicate Tesla is evaluating multiple U.S. locations and plans to expand its solar cell manufacturing, aiming to reach 100 gigawatts of annual solar energy capacity within the next three years.

The real estate sector has also shown signs of movement. Hong Kong property stocks led the charge, with CIFI Holdings rising over 9%, R&F Properties up over 5%, Sunac China up over 4%, and Longfor Group, R&F China, and Country Garden also gaining.

According to research from Southwest Securities, the real estate industry is stabilizing phase-wise, with transaction volumes significantly rebounding year-over-year. Policies continue to be easing, driving market recovery. In February, new home transactions in 43 cities and second-hand home transactions in 14 cities increased by 360.3% and 443.7%, respectively, with notable recovery in first-tier and core second-tier cities. Asset prices, including large-scale assets, are soaring, seemingly changing market expectations for real estate.

Three Major Uncertainties

However, it’s hard to say whether the market will remain smooth sailing. Currently, three major uncertainties still exist.

First, with the Spring Festival approaching, “deleveraging” remains a trend. As of last Friday, the Shanghai Stock Exchange’s margin financing balance was 1,335.858 billion yuan, down 7.619 billion yuan from the previous trading day; the Shenzhen Stock Exchange’s margin financing balance was 1,302.526 billion yuan, down 9.391 billion yuan; combined, the two markets totaled 2,638.384 billion yuan, a decrease of 17.01 billion yuan from the previous day.

Second, regarding external liquidity, two indicators are still worth watching. First, the U.S. leveraged loan index rebounded last Friday but remains weak, making it difficult to determine if the trend will change. Second, although the virtual currency market has begun to rebound, the strength of the rebound is limited. Today, while Asia-Pacific markets rebounded strongly, most virtual currencies still experienced declines.

Third, the Japanese market faces significant uncertainties. Some analysts believe that Prime Minister Yoshihide Suga’s proactive fiscal policies and efforts to curb interest rate hikes will stimulate Japan’s stock market in the short term. However, yen depreciation will further increase inflation. Additionally, as Japan’s debt-to-GDP ratio rises due to stimulus measures, Japanese bond yields continue to climb. A sharp rise in government bond yields could trigger a global liquidity contraction, indicating Japan is shifting from being a “cheap global lender” to a “funding black hole,” posing liquidity risks to the market. Today, Japanese government bonds collectively plummeted, causing yields to spike sharply.

(Source: Securities Times)