A-share market takes a terrifying plunge, capital flow raises concerns

The A-share market in October 2024 can be described as a roller coaster ride. On the 11th, the stock market was like a roller coaster, causing investors to break out in a cold sweat. The Shanghai Composite Index fell by 2.55%, the Shenzhen Component Index fell by 3.92%, and the ChiNext Index plummeted by 5.06%. On this day, 4,862 stocks fell in the market, with only a meager 422 stocks rising. Seeing such numbers, many retail investors probably wanted to cry.

Great revelation of capital flow

So, what exactly caused the market to be so turbulent? Let's take a look at the flow of funds.

From October 8th to 11th, in just 4 days, the net outflow of A-share main funds was a staggering 502.981 billion yuan! This number is simply terrifying, no wonder the market fell so much. However, it is interesting to note that during the same period, stock ETFs received a net inflow of 16.3066 billion yuan. What does this indicate? It indicates that a group of smart investors are taking the opportunity to bottom fish.

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Let's take a look at the specific situation of individual stocks. There are 57 stocks with a net outflow of main funds exceeding 1 billion yuan, and these stocks are probably abandoned by institutions. But at the same time, there are also 35 stocks that received a net inflow of main funds exceeding 100 million yuan, and it seems that some people still have a good outlook for these stocks.

The total transaction volume of the entire market reached 1,586.802 billion yuan, which shows that everyone is trading frantically. There are 15 ETF funds with a net asset value of more than 30 billion yuan in the entire market, and there are 8 with more than 100 billion yuan, the scale of these funds is really amazing.

Policy vs. fundamentals, which is more important?

Some analysts believe that the current market capital has a greater influence than policy, and policy has a greater influence than fundamentals. In this case, the future market may be very fast, and the fluctuations will also be very large. Everyone should fasten their seat belts and be prepared for a roller coaster ride!

Others say that even if the third-quarter report is not up to expectations, it will not be a signal for the end of the market. On the contrary, if the third-quarter report exceeds expectations, it will be great and will bring a "double hit of fundamentals and expectations". This sounds a bit mysterious, but it also makes sense. After all, the market is so strange, sometimes bad news can become a reason for rising.Is the Non-Bank Sector Becoming the New Favorite?

Recently, everyone has been focusing on the non-bank sector. Some argue that policy shifts are driving market activity, which is the main logic behind current investments in the non-bank sector. Indeed, the performance of securities stocks has been quite good lately, suggesting that some are betting on this sector.

There are even bold claims that the non-bank sector could be poised for a "double play" of valuation and performance, akin to the "Davis Double Play." Such statements are exciting to hear. However, investments should still be approached with caution and not be swayed by such rhetoric.

What is the Market Confidence Really Like?

To be honest, market confidence has been quite shaky recently. Although there is policy support, investors seem to be a bit hesitant. The liquidity situation for public funds and foreign capital has improved, but whether this can be sustained is uncertain.

I've heard that at the 27th China-ASEAN Leaders' Meeting, China expressed its willingness to promote infrastructure cooperation, sign free trade agreements, and strengthen the connection of cross-border payment systems. These sound like positive developments, but it's hard to say how much impact they will have on the A-share market.

Where Should Retail Investors Go?

As an ordinary retail investor, seeing so many professional analyses, I must admit I'm a bit overwhelmed. Should I buy or sell? Should I chase gains or cut losses? These questions are really headache-inducing.

I think it's important to make decisions based on one's own actual situation. If you have some spare cash, you might consider buying some quality stocks at a low point. But if funds are tight, don't be greedy; preserving your principal is the key.

Overall, the A-share market is like a pot of boiling water, ready to overflow at any moment. We, as small retail investors, should be cautious and avoid getting burned. But speaking of which, the old adage that the stock market is risky and investments should be made with care still holds true. Never forget this when investing!