A shares fell on hot search again. What is the reason for the decline? A number of fund companies voiced their voices.

  On May 24th, A shares fell into hot search again. At the close, the Shanghai Composite Index fell 2.41%, the Shenzhen Composite Index fell 3.34%, the Growth Enterprise Market Index fell 3.82%, and Kechuang 50 fell nearly 5%. A total of 4461 stocks fell and only 278 stocks rose.

  Wind data shows that northbound funds sold 9.549 billion yuan in the whole day, and the single-day net sales reached a new high since March 15.

  Why did A shares plummet? What do you think of the market outlook A number of fund companies interpret the performance of the market today.

  Why did A shares plummet?

  Bank of China Fund said that the main factors affecting the market today are as follows:

  First of all, after a strong rebound in the early stage, the upward momentum of A shares gradually weakened. Since the bottom rebound of A-shares on April 26th, after three weeks of repair, the space for oversold rebound has basically been realized, and the oversold kinetic energy of A-shares is gradually weakening.

  Secondly, the overseas interest rate hike cycle continues to strengthen, affecting market risk appetite. European Central Bank President Lagarde made it clear on May 23rd that the European Central Bank will decide to raise interest rates at the monetary policy meeting in July this year. At the same time, the Fed accepted more than $2 trillion in fixed-rate reverse repurchase for the first time, hitting a record high for three consecutive days. The excess liquidity and high inflationary pressure reflected by it may prompt the Fed to intensify policy tightening.

  Third, today’s sharp adjustment of Hong Kong stocks and the sharp net outflow of funds from the north have affected the sentiment of A-share investors.

  According to the Morgan Fund, with the control of the epidemic in Shanghai and the warm care of the policy, the temperature recovery of A shares has been more obvious since May. After accumulating a certain increase, the upward pressure on the market is greater, and it is not surprising that there is a staged callback. Kechuang 50, which had a good rise in the previous period, led the decline. First, there may be funds to settle some of the previous profits. Second, today, an innovative drug, White Horse, experienced a large decline as expected due to the research and development of new drugs, which increased market volatility.

  ICBC Credit Suisse Fund said that the current overseas interest rate hike policy has been continuously strengthened, and the negative interpretation of the fundamentals and overseas situation in China has been extreme since this year. Since the Shanghai Composite Index broke through 3,100 points and rebounded at the bottom, the characteristics of the emotional game are still remarkable, and the index failed to break through when it approached 3,150 points three times. As a weather vane of funds, it has flowed out substantially in the past two days, which has suppressed the market participation sentiment to some extent.

  How to look at the market outlook?

  The Bank of China Fund believes that the most difficult period of the market may have passed, and it will be gradually repaired but the space is limited. On the one hand, the 429 Politburo meeting emphasized that "the epidemic should be prevented, the economy should be stabilized, and development should be safe", and the policy bottom has been formed. Recently, the central bank lowered the lower limit of mortgage interest rate and LPR interest rate, and the policy of steady growth has been gradually overweight. On the other hand, it is still necessary to observe the improvement of the following factors in the larger-scale rebound and even reversal of the market: first, the domestic epidemic situation has further improved; second, the steady growth policy has been further exerted and effective; third, the inflation in the United States has clearly dropped and the attitude of the Federal Reserve has turned to doves.

  Morgan investment fund believes that looking forward to the future, the negative factors affecting the market in the early stage will be gradually eliminated, and A shares are expected to gradually bottom out. Yesterday, the National People’s Congress further deployed a package of measures to stabilize the economy, striving to push the economy back to the normal track and ensure that the economy operates within a reasonable range. The package of measures to stabilize the economy announced this time is not only timely, but also linked with relevant policies such as finance, finance, industry and supply chain, covering industries that were seriously affected in the early stage and key areas related to the national economy. It is expected that relevant rules will be implemented one after another to help the economy grow steadily.

  According to the Morgan Stanley Fund, in this big environment, A shares may consolidate in the second half of the year under the marginal improvement of related factors. Investors can focus on the manufacturing industry whose predicament is reversed after the epidemic is controlled, non-essential consumer goods that benefit from economic recovery, and growth sectors with high certainty of industry development space and sufficient valuation digestion.

  ICBC Credit Suisse Fund said that the current valuation of A shares is at the bottom of the market, the domestic and international environment is gradually improving, and the time when the market reaction is more intense may have passed. The the State Council executive meeting deployed a package of measures to stabilize the economy and decided to implement 33 measures in six aspects to further stabilize the basic economy. It is suggested that we should continue to pay attention to the infrastructure and real estate industry chain under the logic of "steady growth", the opportunity to repair the valuation of cyclical products under the logic of "inflation", and the growth sectors such as new energy power generation, consumer electronics and new energy vehicles with matching valuation and performance growth under the logic of "high prosperity".

  CEIBS said that it is unlikely that the short-term market will directly enter the reverse trend. Because the current market has fully taken into account the impact of the epidemic, it is expected that the short-term market will still be dominated by shocks under the premise of the subsequent non-proliferation of geopolitical conflicts and other factors. Standing in the dimension of the whole year, we will continue to be optimistic about the new infrastructure areas with high growth and high certainty in the medium term.