The Asia Pacific stock markets collectively suffered heavy losses today.
The major European stock indexes that have just opened have all fallen sharply. As of press time, the European Stoxx 50 Index, German DAX Index, UK FTSE 100 Index, and French CAC40 Index have all fallen by about 2%.
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In the Middle East stock market, the Türkiye Stock Exchange announced that it would trigger the circuit breaker mechanism for the second time.
Specifically, the Japanese and Korean stock markets experienced a sharp decline, with the Nikkei 225 index closing down 4451.28 points at 31458.42 points, the largest drop in history, with a decline of 12.4%, a 26% drop from its July high, and the Japan Eastern Stock Exchange index falling 12.23%. The South Korean Composite Index closed down 8.77% at 2441.55 points; The Australian S&P 200 index fell 3.7% to 7649.6 points.
After today's trading session, Japanese Finance Minister Toshiichi Suzuki expressed strong concern over the stock market's decline and urged the government to remain calm in assessing the situation. The stock market has had multiple impacts on the Japanese economy, and stock prices are determined by the market. The Financial Services Agency is also closely monitoring market trends with a sense of urgency and will not comment on whether the current level of the yen is too high. The South Korean side stated that today's stock market decline is "excessive" and will closely monitor the foreign exchange and stock markets, and will quickly take market stabilization measures if necessary.
The Thai finance minister stated that the stock market decline is driven by external factors and should be supported by government measures. The government equity fund will be expanded before October to support the stock market.
In addition, Taiwan, China's Taiex fell 8.35% to 19830.88, the worst single day performance ever. Hong Kong stocks also fell, with the two major stock indexes falling about 3% at one point during the trading session, and the decline slightly narrowed in the closing session. As of the close, the Hang Seng Index fell 1.46% to 16698.36 points, and the Hang Seng Technology Index fell 1.36% to 3339.42 points.
The A-share market also plunged in the afternoon, with the Shanghai Composite Index falling more than 1% and falling below 2900 points, and the Shenzhen Component Index and ChiNext Index falling nearly 2%, both hitting new lows in their respective stages. As of the close, the Shanghai Composite Index fell 1.54% to 2860.7 points, the Shenzhen Component Index fell 1.85% to 8395.05 points, and the ChiNext Index fell 1.89% to 1607.29 points. The total transaction volume of the two markets was 792.5 billion yuan, an increase of about 70 billion yuan from the previous day. More than 4700 stocks in the market are floating green, with semiconductor, military, automotive, pharmaceutical, real estate and other sectors falling. Consumer sectors such as tourism, catering, education, and retail are active against the trend, while Xiangyuan Culture and Tourism, Rhine Sports, Helen Piano, and Action Education are hitting the daily limit up; Baijiu shares were relatively strong, with Shanxi Fenjiu up nearly 4%, Kweichow Moutai and Wuliangye up nearly 2%; The concept of online games has also risen, with companies such as Fuchun Holdings and Mingchen Health reaching their daily limit up, and Jibit rising over 7%; In addition, Industrial Fulian experienced a significant drop during trading, with a pullback of about 30% from its historical high.
It is worth noting that four Shanghai and Shenzhen 300 ETFs saw a significant increase in trading volume in the afternoon, with Huatai Bairui Shanghai and Shenzhen 300 ETF, Yifangda Shanghai and Shenzhen 300 ETF, Huaxia Shanghai and Shenzhen 300 ETF, and Jiashi Shanghai and Shenzhen 300 ETF trading at 6.92 billion yuan, 2.794 billion yuan, 1.408 billion yuan, and 1.407 billion yuan, respectively. In addition, the Shanghai Stock Exchange 50 ETF sold 5.58 billion yuan, with significantly larger transaction volumes compared to the previous trading day.
Consumer stocks are active against the trend
Major consumer sectors such as tourism, catering, education, retail, and food and beverage rose against the trend today. As of the close, in the tourism and catering sector, Xiangyuan Culture and Tourism and Rhine Sports hit the daily limit up, while Emeishan A and Yunnan Tourism rose more than 4%; In terms of the education sector, Helen Piano, Angli Education, Kevin Education, Action Education, Zhonggong Education, and others hit the daily limit up, while Jinling Sports rose by about 5%; In terms of retail sector, companies such as Friendship Group, Aiside, Yifeng Pharmacy, Central Shopping Mall, and Dalian Friendship have hit the daily limit up.
It is worth mentioning that Baijiu shares have performed strongly today, with Shanxi Fenjiu up nearly 4%, Luzhou Laojiao and Yingjia Gongjiu up more than 2%, and Kweichow Moutai and Wuliangye up nearly 2%.
On the news front, the State Council recently issued the "Opinions on Promoting the High Quality Development of Service Consumption", proposing to accelerate the construction of a new development pattern, coordinate the expansion of domestic demand and the deepening of supply side structural reform, expand the opening up of the service industry, focus on improving service quality, enriching consumption scenarios, optimizing the consumption environment, and using innovation to stimulate the endogenous driving force of service consumption and cultivate new growth points of service consumption.
The Opinion proposes 6 key tasks and 20 key tasks for improving the supply of key service industries. The six overall policies include: 1) tapping into the potential of basic consumption; 2) Stimulate the vitality of improvement oriented consumption; 3) Cultivate and strengthen new types of consumption; 4) Enhance the momentum of service consumption; 5) Optimize the service consumption environment; 6) Strengthen policy guarantees. Specific expressions include: 1) Catering: supporting local areas to carry out characteristic catering activities to promote consumption; Encourage internationally renowned brands to open stores in China. 2) Hotel: Cultivate high-end hotel and homestay brands; Support the integration and development of accommodation industry with tourism, health and wellness industries. 3) Tourism: Enrich tourism products and promote the development of integrated business models, enhance project experience and interactivity; Support the development of silver tourism, cross-border tourism, and sports tourism, and improve the quality of transportation services.
Huatai Securities pointed out that in the short term, policy support is expected to consolidate the confidence of consumers and practitioners, further driving the recovery of the social service sector. In the medium term, the offline service sector will continue to optimize from the perspectives of content and scene quality, business model upgrading, etc., and drive the release of potential demand momentum from the supply side. We are optimistic about the valuation repair opportunities and long-term growth resilience of various segmented sector leaders under the resonance of supply and demand and the improvement of the pattern.
The concept of online gaming is on the rise
The concept of online games saw a strong upward trend during the trading session. As of the close, companies such as Fuchun Holdings, Huicheng Technology, Kairuide, and Mingchen Health rose by the daily limit, while Tianyin Holdings and Jibit rose by over 7%.
In terms of industry, recently in July, the domestic online game version was released, and 105 games including miHoYo's "Xingbu Valley", Tencent's client game "Dark Zone Breakout: Infinite", Jibit's "Legend of the Sword and Staff", and Sanqi Interactive Entertainment's "Infinite Dreams" have passed the review.
At the same time, the Game Working Committee released a report on the gaming market for the first half of the year. From January to June 2024, the actual sales revenue of the Chinese gaming market was 147.267 billion yuan, a year-on-year increase of 2.08%. The domestic sales revenue of self-developed games was 117.736 billion yuan, a year-on-year decrease of 3.32%, while the actual sales revenue in overseas markets was 8.554 billion US dollars, a year-on-year increase of 4.24%. The United States, Japan, and South Korea are the main overseas markets, accounting for 57.48%. Mobile games account for 73.01% of the actual sales revenue in the gaming market, while the proportion of client games has increased to 22.93%. The web gaming market continues to shrink.
Dongguan Securities stated that game licenses will continue to be issued steadily, the user base of small games will continue to break through, and the user circle of the industry will also be expanded. It is optimistic that the development of small games will drive the continuous recovery of the gaming industry.
Industrial Fulian plunged sharply
Industrial Fulian plunged again today, dropping more than 9% at one point and reaching a low of 20.28 yuan, down more than 30% from its previous historical high. As of the close, the stock fell 8.55% to 20.42 yuan, with a full day trading volume of 4.89 billion yuan and a latest market value of 405.7 billion yuan.
The 2024 interim performance report disclosed by the company yesterday evening showed that the total operating revenue for the first half of the year was 266.091 billion yuan, a year-on-year increase of 28.69%; The net profit attributable to shareholders of the listed company was 8.739 billion yuan, a year-on-year increase of 22.04%.
Industrial Fulian stated that the main reason for the performance changes in the first half of the year was due to the strong demand growth for AI servers. With the ability to vertically integrate the entire AI industry chain, the company's cloud computing business revenue grew strongly. Among them, the revenue of AI server products increased exponentially, showing an accelerating growth trend. The proportion of cloud service provider revenue continued to increase, driving the company's revenue and profitability growth. The company seizes the opportunities of digital economy and AI development, and through advanced technology research and development and production capacity layout, has achieved significant leading advantages in cloud computing, network communication and other sectors in the industry.
Xinda Securities pointed out that the current development of AI has not stopped, and software and hardware are iterating synchronously. According to recent financial reports in North America, AI has generated significant synergy with cloud vendors' existing businesses such as advertising recommendations and search recommendations, and some cloud vendors have achieved good returns. Looking ahead, AI is expected to generate more demand, and there is still a lot of room for improvement in computing power. The company continues to focus on GPU module, substrate, and backend AI server design and system integration in the upstream of the AI industry value chain, fully utilizing the advantages of intelligent manufacturing and research and development throughout the entire industry chain to provide customers with complete solutions, and is expected to continue to enjoy the dividends of industry development.
How will A-shares proceed in the future
What will happen to A-shares after the global stock market crash? CITIC Securities pointed out that from the perspective of market liquidity, the marginal impact of foreign investment on A-shares has significantly increased, but it is difficult to have sustained inflows until the price signal is clear. There is a lack of incremental funds in China, and the market still relies on Huijin's increased holdings to support the bottom. Global high-risk assets have synchronously declined, and RMB assets are relatively safe at a low level. It is expected that the market will continue to bottom out, and the major turning point of the annual level market will only appear after the price signal becomes clear.
China International Capital Corporation (CICC) stated that the probability of global funds flowing back to Chinese assets has increased against the backdrop of increased disturbances in peripheral markets. From the perspective of valuation, since the adjustment in May, compared with the 10-year treasury bond bond interest rate has dropped to 2.2%, the CSI 300 dividend yield has further increased to 3.1%, and A-share valuation is still attractive.