The sharp weakening of A-shares was mostly due to a combination of fundamentals, liquidity, and a significant tightening of regulatory policies, as well as external shocks.
Specifically, the first is the 200414-200517 period affected by the continued weakening of profits, and during the period of the central bank tightened monetary policy, in April 2004 to raise the deposit reserve ratio by 50bp, in October of the same year, there was an interest rate hike operation resulting in the tightening of the currency, superimposed by the Federal Reserve is also in the interest rate hike cycle, domestic and foreign liquidity have tightened the market market has weakened significantly;
Second, the fundamentals of the 2007110-2008111 period also weakened, in 2007 the central bank raised interest rates 6 times, 10 times to raise the reserve ratio, at the same time, the outbreak of the overseas subprime mortgage crisis suppressed the global economic development, the performance of the Shanghai Stock Exchange is also weak
Third, during the period from 201014 to 201017, due to the introduction of the "Four Articles of the New State", the real estate policies were significantly tightened, and the fundamentals and liquidity were also weak during the period.
Fourth, during the period from 2010111 to 2012112, domestic earnings weakened and inflationary pressures rose, and the central bank tightened monetary policy (raising the reserve ratio 12 times during the period for a total of 300bp), and the performance of the European debt crisis was still sluggish
Fifth, 201516-201611 Affected by the 811 exchange rate reform, the CSRC's clean-up of over-the-counter capital allocation and the new circuit breaker regulations, and the Federal Reserve began to raise interest rates, A-shares weakened significantly
Sixth, during the 201811-201911 period, financial deleveraging, Sino-US friction and overseas tightening cycles began to suppress market sentiment;
Seventh, during the 201914-202013 period, profits weakened, the Sino-US ** friction continued, and the outbreak of the new crown epidemic superimposed, and the decline of the Shanghai Stock Exchange also expanded;
Eighth, the outbreak of the Russia-Ukraine conflict during the 2021112-202214 period, the Federal Reserve's interest rate hike cycle disturbed market sentiment, and the spread of the epidemic in Shanghai at that time and the emergency lockdown, all of which had a severe impact on the market
Nine is 202217-2022110 real estate risk exposure domestic earnings have a weakening trend, coupled with the overseas Biden signing the chip bill, the Federal Reserve continued to raise interest rates more than expected in July and September of the same year, ** is obviously under pressure.
So after the big fall, what conditions are needed for the success of the bottom?
Strong policies or high-level statements to reverse expectations are also what we often call the bottom of the policy.
Low valuations and loose liquidity are also necessaryThis is relatively more important, low valuation we call it over-falling, after over-falling there will be a certain amount of game cost-effectiveness, and then whether the game can really get up depends on whether the market liquidity is abundant.
The bottom of the policy, the bottom of the sentiment, the bottom of the market, the order of the threeThe first is the policy bottom, because the good can not change the trend, but to slowly affect the expected changes of the **, and then the bottom of the sentiment, only the market is weak and moderate, or the index has not stopped falling, but the decline is very small and even began to resist.
Finally, the bottom of the marketAfter the emotional smashing was exhausted, the funds began to choose to overshoot, and the bottom of the market slowly came out.
Only the sentiment piece, in addition to feeling the market changes from the disk, can also be referencedAverage stock price index, because it is a strength indicator that reflects the entire market.
It is clear that the index is still very weak, at least not yet in terms of sentiment.
This wave of rescue through the Chinese word is still very strong, but it has caused a blood collapse of other themes, in essence, or the liquidity is not abundant, this kind of demolition of the east wall to make up the west wall.
Normally, there is only a small opportunity for surprise at the moment, and the rest are still patiently waiting.