In recent days, the A-share market has been on a continuous decline. Following a full day of green trading on Tuesday (23rd), the market collectively plummeted on Thursday, with the Shanghai Composite Index breaking below the psychological barrier of 2900 points, marking a new low in five months. Additionally, the total trading volume in Shanghai and Shenzhen markets was less than 600 billion yuan.
On July 25th, all three major indices closed lower. The Shanghai Composite Index hit a low of 2872.85 points before closing at 2886.74 points, down by 0.52%. It marked the fourth consecutive day of declines and fell below the 2900-point psychological level, reaching a new low since February 22nd. The Shenzhen Component Index closed at 8474.7 points, down by 0.22%; while the ChiNext Index closed at 1644.45 points, down by 0.39%.
The trading volume in Shanghai was 273.82 billion yuan, while Shenzhen saw 315.53 billion yuan in trading, with a total of 588.35 billion yuan between the two markets, dropping below 600 billion yuan. This decrease of 385 billion yuan compared to the previous trading day’s volume of 627.13 billion yuan indicates a lack of market confidence and capital outflow.
East Securities pointed out that in the short term, the market’s bullish sentiment remains weak, and risk appetite is greatly affected by policy expectations and external factors. However, the structural feature of rapid sector rotation continues.
Financial blogger and Weibo influencer “Financial Chen Bin” analyzed, “Shanghai Composite at a new low! Shenzhen Component at a new low! Shanghai and Shenzhen 300 at a new low, CSI 500 at a new low, CSI 1000 at a new low, CSI 200 at a new low! The indices are rapidly hitting new lows across the board, with only the CSI 50, the STAR Market, and the ChiNext board yet to reach new lows.
“… Today’s A-share trading volume is less than 600 billion, falling back to the lowest level of intra-year volume of 580 billion, the repeated cycle of surging and rotating, rapid depletion of existing funds, volume-price leading, volume-price truth, without volume, ultimately a sharp decline from the high, and a continuation of declines at the low, everything in chaos, probability of a continued decline is high.
“… This wave of decline, the first target is breaking below 2900 and closing below 2900 points, and with low volume, indicating no funds are buying the dip; the second target is 2750, if there is no increase in volume, then straight to the third target of 2635, and if there is an increase in volume, then breaking 2750 would lead to a big rebound.
“The rhythm goes like this, as for a reversal below 2635, significant improvements in fundamentals, incremental funds, and confidence are needed.”
With the market facing challenges and uncertainty, investors and analysts are closely monitoring the situation and looking for signs of recovery and stability in the A-share market.