Market Risk Appetite Declines, Institutions Say A-Shares' Downside Is Limited

What is the basis for institutions’ judgment that the downward space of A-shares is limited?

【Market risk appetite decreases; institutions say A-shares have limited downside potential】Cailian Press, March 24 — Yesterday, the A-share market experienced a broad decline, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all falling more than 3%. Over 5,100 A-share stocks declined, with more than 130 hitting the daily limit down. Sectors such as gold, OLED, and liquid-cooled servers saw significant adjustments, while sectors like coal rose. Market turnover reached 2.45 trillion yuan, an increase from the previous trading day. As market risk appetite declines, cautious sentiment among funds rises. As of March 20, the margin financing balance in A-shares was 26.3229 billion yuan, and the securities lending balance was 26.1484 billion yuan, with last week’s financing balance decreasing by 1.8418 billion yuan. On March 23, net outflows of over 79 billion yuan were observed in the main funds of the Shanghai and Shenzhen markets, with some broad-based ETFs experiencing increased trading volume. Analysts believe that the space for A-shares to continue falling sharply is limited, but external shocks could still trigger phased volatility. Confirming the bottom range requires time to exchange for space. The broader recovery of PPI, price transmission, and the restoration of corporate profitability are expected directions this year with both expectations and growth potential. (China Securities Journal)