It truly lives up to the title of “Golden September”!

In September, driven by a series of heavyweight economic stimulus policies, A-shares and Hong Kong stocks ushered in an epic bull market, leading the global stock market.

In addition, in the Asian markets, emerging markets such as Thailand and India performed well, with the Thailand SET index rising by 6.7% cumulatively, and the India NIFTY 50 index rising by 3.74%.

The Japanese and Korean stock markets are in a downturn, with the Nikkei 225 index falling by 1.88% cumulatively, and the Korea Composite Index falling by 3.01%.

In the overseas markets, due to the Fed rate cut, the U.S. stocks performed well. The Nasdaq 100 index rose by 2.22% cumulatively.

The European stock markets show divergent trends. Among them, the Germany DAX index rose by 3%, the France CAC40 index rose by 2.11%, and the UK FTSE100 index fell by 0.67%.

A-shares witness history!

On the last day of September, A-shares surged to a close.

Not only did the SSE Composite Index successfully stand at 3300 points, but the Shenzhen Component Index and the Chinext Price Index also hit their largest intraday gains since the turn of the century.

It is worth noting that the total turnover of the Shanghai and Shenzhen markets today was nearly 2.6 trillion yuan, setting a new historical record in turnover.

As of the last trading day of the month, the SSE Composite Index rose by 17.39% for the month, the Shenzhen Component Index rose by 26.13%, and the Chinext Price Index rose by 37.62% for the month.

Looking at the trend, the A-share market in September showed an overall trend of starting low and ending high. From the beginning of the month until before the Mid-Autumn Festival, the three major indices continued to shake and decline. However, post-Mid-Autumn Festival (September 18), a slight rebound began, and since the announcement of a series of financial policies by the central bank, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission on September 24, the market has seen a significant rise.

From the 24th until now, the SSE Composite Index has increased by 21.37%, the Shenzhen Component Index by 30.26%, and the Chinext Price Index by 42.12%.

In terms of industries, sectors such as non-bank financials, real estate, and computers performed particularly strongly; within thematic concepts, sectors like state-owned enterprise reform and the Huawei industry chain showed active growth.

In terms of individual stocks, the top five performers in cumulative increase for September were: Shenzhen Infogem Technologies at 285.09%, Shuangcheng Pharmaceuticals at 213.41%, Hanjia Design Group at 179.73%, Huaxi Everbright at 149.94%, and SGSG Science & Technology at 149.13%.

The top five in terms of cumulative decline in September are: Dazhong Transportation -17.49%, Shanghai Prosolar Resources Development -15.7%, China West Construction Group -10.48%, Lingyi iTech -10.38%, JIALIQI -8.65%.

Hong Kong stocks rebound strongly!

In September, the Hong Kong stock market also achieved remarkable gains. By the end of the last trading day, the Hang Seng Index had risen by 17.48%, the Hang Seng Tech Index by 33.45%, and the Hang Seng China Enterprises Index by 18.62%.

From the trend perspective, unlike A-shares, the rebound in Hong Kong stocks began before the Mid-Autumn Festival. With a series of policy announcements, Hong Kong stocks surged from September 24.

From the 24th to date, the Hang Seng Index has risen by 15.82%, the Hang Seng Tech Index by 28.49%, and the Hang Seng China Enterprises Index by 17.54%.

In terms of industries, the China-affiliated brokerage, Mainland Real Estate, and Dining sectors have shown strong performance.

On the individual stock side, the top five in terms of cumulative increase in September are: Sunac 156.86%, GUOTAI JUNAN I 113.46%, RS MACALLINE 91.89%, China Vanke 81.27%, Hopson Dev Hold 80.22%.

The top five in terms of cumulative decline in September are: MEIC JIAHE -35.93%, Fourth Paradigm -34.02%, Bank of Guizhou -12.42%, BRILLIANCE CHI -7.38%, Power Assets -7.21%.

Key Events of the Month

Domestically, a series of major policies were introduced at the end of September, injecting confidence into the market.

On September 24, the People's Bank of China sent a strong signal, proposing three major measures: lowering the reserve requirement ratio and policy interest rates; reducing the interest rates on existing home loans and unifying the minimum down payment ratio for mortgages; creating new monetary policy tools to support the stable development of the stock market.

On September 26, a meeting of the Central Political Bureau emphasized the need to increase the intensity of counter-cyclical adjustments in fiscal and monetary policies; to lower the reserve requirement ratio and implement substantial interest rate cuts.

On September 27, the People's Bank of China announced a reduction in the reserve requirement ratio for financial institutions by 0.5 percentage points and a 0.2 percentage point cut in the 7-day reverse repurchase operation rate.

On September 29, the People's Bank of China, together with the China Banking and Insurance Regulatory Commission, introduced four financial support policies for the real estate sector; at the same time, a market interest rate pricing self-discipline mechanism initiative was launched, specifying a bulk reduction of existing mortgage rates by October 31.

In terms of data performance, the National Bureau of Statistics announced on the 30th that the September Purchasing Managers' Index (PMI) for China's manufacturing sector rose by 0.7 percentage points from the previous month to 49.8%, marking the first increase in six months. Though still below the boom-bust line, the performance was better than expected.

On the foreign front, a global wave of interest rate cuts swept through in September.

On September 18, the Federal Reserve announced its first interest rate cut in four years, with a rate cut of 50 basis points. In addition, the European Central Bank, the Central Bank of Kuwait, the Central Bank of the United Arab Emirates, and others have all announced interest rate cuts this month.

On September 27, former Secretary-General of the Liberal Democratic Party of Japan, Shigeru Ishiba, successfully won the election as the new President of the Liberal Democratic Party. He will succeed the current Prime Minister Fumio Kishida in the parliamentary nomination election on October 1, becoming the 102nd Prime Minister of Japan.

What is the market outlook for the future?

As A-shares and H-shares continue to set new highs, a large number of foreign capital has expressed a bullish view on the Chinese stock market.

Goldman Sachs has raised the target for the MSCI China Index from 60 to 70, and the future 12-month target for the CSI 300 Index has been raised from 3900 points to 4100 points.

Morgan Stanley's Chief Equity Strategist in China, Wang Ying, stated that from a technical perspective, the short-term upside potential for the CSI 300 Index in China is around 10%. She also believes that A shares will outperform the entire emerging markets.

In addition, foreign investment banks such as JPMorgan, UBS, and Bank of America have also voiced optimism about Chinese assets.

Looking ahead, Huaxi Securities believes that we are currently only in the 1.0 stage of the market's uptrend, with A shares showing positive signs.

Stock markets often lead the fundamental reflection. The landing of this round of comprehensive policies is expected to drive the improvement of economic fundamentals. The stock market is known as the barometer of the economy, and the trend of the stock market often leads the macro economy. In history, the bottoming out of A-shares generally comes after the 'market bottom,' leading the 'profit bottom.' The rare early convening of the Political Bureau meeting in September shows the urgency and determination of stabilizing growth policies, making the bottoming out of A-share profits clearer.

Guotai Junan points out that rotation follows the rise, value stocks precede growth stocks, and the decision is made at the end of the year.

Even in the face of a booming market, 'cool-headed thinking' is needed. Under the context of global power play and domestic transformation demands, economic policy orientation, fiscal discipline, and financial regulation may differ significantly from historical experiences, with a greater focus on establishing 'long-term mechanisms.' Therefore, it is determined that the stock market trend will see a rise followed by rotation, value stocks preceding growth stocks, with the market decision made at the end of the year, depending on whether the actual policy implementation can boost expectations.

Regarding Hong Kong stocks, Everbright Securities stated that with the expected improvement in domestic policies and the Fed rate cut, the Hong Kong stock market deserves active attention.

Listed companies in the Hong Kong stock market mainly generate revenue from the domestic market. With the active efforts in domestic policies, the prospects for the micro-end in the Hong Kong stock market are expected to continue to improve. In addition, as an offshore financial market, the Hong Kong stock market is expected to see improved liquidity under the influence of the formal start of the Fed rate cut cycle. Overall, the current Hong Kong stock market is worth actively allocating to and may have greater elasticity compared to A-shares.

Editor/new