What exactly happened that suddenly prompted the northbound funds to surge into the A-shares?


On March 15th, the A-share market's rise, fueled by foreign investment, Vanke's sales, and CITIC's copper analysis, highlighted market vitality, with policy and digital economy growth driving investment amidst caution for risks.

On March 15th, the A-share market experienced narrow fluctuations in the morning and a rebound after probing lows in the afternoon, eventually leading all three major indexes to close in the green. The Shanghai Composite Index increased by 0.55%, while the Shenzhen Component Index and the ChiNext Index saw marginal declines. On that day, the total transaction volume of the Shanghai and Shenzhen stock markets reached 818.4 billion yuan, with northbound funds net buying 32.86 billion yuan, indicating active participation by foreign investors.


Vanke's sales briefing released on the evening of March 14th showed that in February, the company achieved a contractual sales area of 1.001 million square meters and a contractual sales amount of 14.02 billion yuan, reflecting the real estate market's vibrancy.

A research report from CITIC Securities points out that due to disruptions in mine production and expansion of smelting capacity, domestic spot TC prices for copper refining have reached a new low since 2011, significantly deviating from long-term contract guide prices. CITIC Securities believes that the supply tension in the copper industry chain is gradually propagating from the mining end to the smelting end. It is anticipated that the global refined copper supply and demand balance may shift from a slight surplus to a shortage within the year, and they are optimistic about the investment value of the copper sector against the backdrop of supply shortages.

Analysts mention that changes in the A-share market reflect investors' increasing expectations for the preservation of the value of Renminbi assets and a return to fundamentals-driven growth. Additionally, proposals from the Ministry of Industry and Information Technology to accelerate the construction of new information infrastructure such as 5G and the Industrial Internet, as well as initiatives by the Ministry of Transport to enhance technological innovation and develop digital transportation, further support the digital economy. Moreover, the market is also focused on the collective applications of state-owned enterprise index products and the revaluation process of state-owned enterprises, expecting these factors to bring additional funds to the market.

In summary, the dynamics in the A-share market reflect market participants' positive response to China's economic recovery and policy support, as well as their anticipation for future growth opportunities. However, the market still needs to be cautious of risks brought about by external uncertainties and internal adjustments.

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