Last week, the divergent performance of Shanghai and Shenzhen stock markets continued. The weighted stocks in Shanghai stock market moved downturn, and in some degrees influencing the entire Chinese stock market.
By the end of the week, the market exhibited a small scale of return. However, tech stocks, represented by growth enterprise market, continued their upward trend regardless.
At this point, A-share market still obtains positive expectation from investors, under multiple changes occurred domestically and internationally, including but not limited to the overall growing strength of oversea market, the immediate approval of Foxconn into the market, and the arrival of a new economic cycle.
In short, growth enterprises and tech stocks will earn the spotlight in the upcoming months. The position A-share market stands will provide what is called "structural behavior" to come to stage at a macro level. A "structural behavior" refers to the inelastic responsiveness of the whole market subject to certain stocks' rise and fall.
Domestically, deleveraging policy's negative impacts on the capital market diminishes, with the improvement on market liquidity.
On February, domestic manufacturing industry's PMI displays a small scale of upward growth, with a concentrated and rapid increase in export. As such, major economic indexes exceed the expectation.
Internationally, the face-to-face conversation between North Korea and the United States motivated investors to take greater risks.
American stock market, after experienced sharp oscillation at the beginning of 2018, maintains its growth. Nasdaq index of tech stocks, within the range of listed companies, reached a new high. It indicates that global investors carry optimistic expectation towards tech stocks, which when combined with domestic factors, push A-share market to perform even better.
With a hospitable attitude, the regulatory commission advocates the arrival of new economic cycle, which offers optimized atmosphere for growth enterprise market and tech stocks.
Last week, Foxconn was approved to enter the market immediately, creating a new record that within only twenty work days the company finished reporting and approving. This is a very clear signal of the preference from the commission.
Recently, one key modification of stock market policy, as adjusted by the commission, is to support tech companies even harder, under the method of attracting more unicorn firms to enlist on A-share market.
In the second-half of last week, leading stocks in field of internet, software services, and electric instruments continued to rise. The index of these sectors rose by more than 3 percent on a daily basis.
To be specific, subject shares, such as industrial internet or domestic-manufactured softwares, reflect an obvious and skyrocketing increase. The market, as a whole, is believed to be full of opportuntities.
It is safe to envision that a large amount of tech companies enlist in A-share market and become the institutional investors' primary targets. Therefore, growth enterprise market, led by tech firms, is expected to be the leading protagonist of next market play.