Last night, US stocks fell sharply; this morning, Asia-Pacific stocks also fell. However, A-shares and Hong Kong stocks did not continue to be weak as they were yesterday. In the morning session today, after a slight lower opening for the two major markets, they quickly launched a counterattack. As of the midday close of Hong Kong stocks, the Hang Seng Index's increase has expanded to nearly 1%, while the Hang Seng Tech Index rose by nearly 0.4%.

Analysts believe that there are three bullish signals in the market:

First, from a structural perspective, the financial and real estate sectors saw significant gains today. On the one hand, the State Council Information Office will hold a press conference on promoting the stable and healthy development of the real estate market; on the other hand, there are market rumors of banks lowering deposit rates.

Second, from the perspective of liquidity, the recent market liquidity is extremely ample. During the sharp market pullback yesterday, the overnight repo rate for one-day treasury bonds briefly dropped to around 1.5%. This means that many funds, after cashing out of the stock market, did not leave this market.

Third, there is also good news internationally. According to Global Network News, the British political arena has sent a signal of 'restarting relations with China,' and the British Foreign Secretary may visit China this week.

Counterattack against the market trend

Last night, US stocks plummeted, and overseas Chinese assets also weakened significantly. Despite the high correlation with Chinese assets, the FTSE China A50 Index futures saw a counterattack. The index initially fell by over 1%, but turned positive around 10 o'clock.

The A-share SSE Composite Index turned red across the board around 10 o'clock. A-share bank stocks fluctuated and strengthened, with city commercial banks leading the gains. Bank of chongqing surged over 7%, chongqing rural commercial bank, bank of changsha, bank of chengdu, bank of xi'an, bank of guiyang, bank of jiangsu, and others followed the uptrend.

The semiconductor industry also defied the market trend, with lithography concept stocks opening strong. Anhui guofeng new materials once hit the limit up, crystal clear electronic material, jiang su yida chemical rose over 10%, poly plastic masterbatch, jiangsu baichuan high-tech new materials, jiangsu nata opto-electronic material, and others followed the uptrend.

Brokerage stocks surged, huaxi securities straight up limit, southwest securities, sealand, haitong sec, tianfeng sec, sinolink, and others followed the uptrend.

Hong Kong stocks, which plunged yesterday, also rebounded today. Both the Hang Seng Index and the Hang Seng China Enterprises Index turned red. Mainland real estate and financial sectors rose across the board. On the news front, multiple places like chengdu, tianjin, etc., introduced further relaxed real estate policies.

Mainland real estate stocks soared across the board, with sunac skyrocketing nearly 20%, China Vanke rising over 14%, logan group, r&f properties rising over 12%. Sino-ocean gp, longfor group, shimao group, cifi hold gp, and others followed the uptrend.

China-affiliated brokerage stocks rebounded, leading the surge in the financial sector, with GTJA rising nearly 7%, China Merchants, Orient, China Merchants, Huatai Securities, etc. up over 4%.

The renminbi also saw a hundred-point increase.

Three bullish signals.

Recently, the A-share market has been quite volatile. In fact, investors should understand two points: one is that the loose trend has not changed; the other is that the liquidity trend has not changed. The sentiment of the entire market is quite high, partly due to the prevalence of live streaming platforms, and partly due to the rapid dispersion of chips during the previous surge, leading to an unstable chip pattern. Today, there are three main reasons why Chinese assets are stronger than those in the external market.

Firstly, today's rebound in financial real estate is good. On one hand, the State Council Information Office will hold a press conference on promoting the stable and healthy development of the real estate market. Minister of Housing and Urban-Rural Development Ni Hong, together with officials from the Ministry of Finance, Ministry of Natural Resources, People's Bank of China, and China Banking and Insurance Regulatory Commission, will introduce the relevant situation of promoting the stable and healthy development of the real estate market and answer questions from reporters. As the focus is on real estate and local government bonds, this is undoubtedly a major positive for the balance sheets of banks. On the other hand, there are reports in the market about banks lowering deposit rates.

Secondly, recently, we can note that the market liquidity is actually extremely abundant. Yesterday, during the sharp market correction, the one-day reverse repurchase rate of government bonds once hit around 1.5% at the close. This rate was very high on October 8th, but during the market's sharp fall on the 9th, the rate was brought down. This means that after many funds cashed out in the stock market, they turned around to engage in reverse repurchase of government bonds, which belongs to on-exchange transactions, indicating that these funds have not left the market.

Thirdly, the recent geopolitical situation has been quite complex, but there have been no shortage of bullish signals. According to Global Times, "The UK's new government is eager to restart relations with China," several Western media outlets recently made such comments. According to reports from Reuters and other media, British Foreign Secretary Rami may visit China this week. On the 14th, British Prime Minister Starmer, in an interview with Bloomberg, when asked about this visit, said: "We will challenge where necessary, but we are also very practical, hoping our country can progress and succeed." On the same day, British Secretary of State for Business and Trade Reynolds stated that the previous Conservative government had "done too little" on its relations with China and that the UK "needs more contact with China"; the UK does not intend to follow the European Union in imposing tariffs on electric vehicles imported from China.

Editor/rice