Rebirth of the Capital Legend

These two major benefits will occur during the lunch break.

Like a giant rock falling into a calm lake, instantly creating a thousand waves.

The market's vast investor base, which had already given up hope, including a host of speculative funds, institutions, and retail investors, were completely incredulous at the sudden arrival of these two major positive developments.

"Holy crap, holy crap, great news is here, and it's huge good news!"

A large number of retail investors gathered on various online stock investment exchange platforms, someone exclaimed.

"I saw it! The central bank said that my country's interest rate changes will not follow the Fed's lead. We have our own rhythm. They also said that they do not rule out the possibility of further interest rate cuts and reserve requirement ratio reductions in the future. Wow... I was wondering why, in the market this morning, while other major sectors collapsed, only banks held up and did not fall. It turns out there was a major positive development. These domestic institutions probably already knew that there would be such a positive development at noon, so they frantically flocked to the banking sector, right?"

"It shouldn't be that bad. If this positive news had been leaked in the morning, the market wouldn't have crashed like that."

"Finally, some good news. It's really... I almost lost my mind today because of the market crash."

"Absolutely! A hundred stocks hit their daily limit down in just half a day. It's outrageous."

"Besides the positive news from the central bank, the positive news regarding 'new energy vehicles' is also explosive. Previously, the new energy vehicle sector had been performing poorly, and the entire 'new energy industry chain' had been declining, all because of market rumors that subsidies would be phased out next year. Now, we don't have to worry about that anymore. I feel like the entire 'new energy industry chain' will surge across the board this afternoon, right? After all, it's such a big positive development."

"The rumors about subsidy reduction next year have been clarified, so the big stone that has been suppressing the valuation of the 'new energy industry chain' sector has been removed. I feel that the 'new energy industry chain' sector will definitely surge this afternoon, and I estimate that a lot of funds will rush to buy when the market opens."

"It's not just the 'new energy industry chain,' is it? This positive news from the central bank should benefit all stocks in the entire market."

"The central bank only said that it might cut interest rates and reserve requirements in the future. This possibility... is quite subtle."

"Isn't that the point? The point is that our interest rates won't follow the Fed's interest rate policy. Originally, everyone was worried that we would follow the Fed when it entered a rate hike cycle. Now, this statement clearly shows that we have our own pace and will not follow the rate hike. Moreover, my country's macroeconomic situation is actually not suitable for raising interest rates. Every country's economic cycle is different, so I think we really can't generalize."

"That's right. As long as there's no longer any concern about interest rate hikes, then macro liquidity will be much more abundant. The current poor market performance is precisely because of liquidity issues. If market liquidity is abundant, the margin for error in market investment and the strength of bullish support during market corrections will be significantly different from what we have now."

"I feel that even if there is some liquidity released from the macro level, given the current stark contrast between the stock market and the real estate market, I feel that this liquidity will be absorbed by the real estate market, and very little of it will flow into the stock market."

"Regardless of how much of the released liquidity ultimately flows into the stock market, something is better than nothing, right?"

"That's true. I think the key point is this positive news regarding 'new energy vehicles,' which is crucial. This afternoon, we'll see if the 'new energy industry chain' can ignite the market's bullish enthusiasm."

"I don't think it will be easy to revive the market, given how poor the market performed this morning and how the market sentiment has already collapsed."

"Yes, it's possible that the market will rebound slightly at the open, and then everyone will continue to sell off in order to compete for liquidity."

"There's no reason for them to continue dumping shares, right? After all, many small and mid-cap stocks in the 'emerging industrial chain' sector have already fallen back to their previous starting points!"

"Those stocks that have fallen back to their starting point for an upward move already have poor fundamentals, so they don't have much speculative or investment value, right?"

"But it shouldn't keep falling!"

"No matter what, some good news is better than none, right?"

"That's for sure. I'm just afraid that once the good news is fully priced in, it will turn into bad news. Sigh... I was really scared by the market movement this morning."

"Damn it, what am I going to do? I just sold at the limit down price near the midday close this morning. What if it suddenly surges this afternoon? Are they kidding me?"

"Hurry up and catch up this afternoon. With this kind of positive news, the market will definitely surge this afternoon."

"I dare not have too high expectations. Let's wait and see."

"For the market to improve this afternoon, funds need to come in and buy the 'Chinese Online' stock. Only then will there be any hope."

"'Huawen Online' is a dead stock. An expired leader is no better than a dog. I don't think there's any need to pay attention to it anymore. The market focus this afternoon will inevitably be on the 'new energy industry chain' theme. Just focus on stocks in this sector and see which one hits the daily limit first this afternoon, then buy that one."

"This positive news regarding 'new energy vehicles' should directly benefit the entire vehicle sector, right?"

"This should be good news for lithium batteries, right?"

"I think it's worth investing in Tinci Materials stock, and 'Shuguang Shares' is also a good option."

"At this point, it's pointless to say anything; we still need to observe the actual market performance after it opens."

"Everyone, what's the likely trend for the banking sector this afternoon? I just cut my losses and reduced my holdings in bank stocks this morning, and I feel like I made another mistake!"

"I don't know, but it probably won't go up much, right?"

"I don't think the banking sector will rise much this afternoon."

"Such a big positive development, and the price isn't going up?"

"The main problem is that it's overdrawn. If the banking sector had fallen along with the market index this morning, then with the positive stimulus at noon, a number of stocks in the sector would definitely have risen in the afternoon. But now... it's really hard to say."

"That's right. If expectations are met, then they're no longer expectations."

"I feel the banking sector will fall this afternoon."

"It will fall? It shouldn't be that bad, right?"

"It's highly likely the sector will fall. After all, the banking sector is inherently a safe-haven sector. Only when the market is performing poorly and a large amount of capital needs to seek refuge will it tend to flow into the banking sector. With these two positive factors, it's clear that market sentiment in the afternoon won't be worse than in the morning. Many bargain hunters will enter the market. As long as market sentiment recovers slightly and the losses aren't as extreme as in the morning, the market's risk appetite will inevitably increase, and the safe-haven attribute will inevitably decrease rapidly. Since the safe-haven attribute is likely to decrease rapidly, what's the logic behind the banking sector's rise? Why would subsequent funds continue to cluster together to maintain the stock price?"

"Isn't the potential upside for the banking sector based on future interest rate and reserve requirement ratio cuts?" "But that expectation will only be truly reflected after there's concrete news. Currently... it's far from that point. And... frankly, are bank stocks really cheap right now? Are bank stocks at 5000 points on the Shanghai Composite Index really cheap? Even if interest rate and reserve requirement ratio cuts give banks more room to grow, can their performance maintain stability and gradually improve in the future? I think that's quite difficult."

"I think that the banking sector, supported by the positive news, is unlikely to fall this afternoon, even if there is a possibility of profit-taking after the positive news has been realized."

"Agreed, the probability of it remaining flat is quite high."

"What about the liquor and white goods sectors, which performed strongly this morning? Will they outperform the banking sector this afternoon?"

"The logic behind the morning's market movement in the liquor and white goods sectors should be the same as that in the banking sector, right? They are both driven by the logic of safe-haven characteristics."

"Yes, the logic behind the two main themes in the morning's market trend is basically the same."

"So that means the liquor and white goods sectors will most likely follow the banking sector this afternoon?"

"I think the liquor and white goods sectors will definitely perform worse than the banking sector in the afternoon. After all, although the logic behind both is the same, the banking sector is directly stimulated by the positive news at noon, making it a leading sector in the market with a more direct positive stimulus. On the other hand, the liquor and white goods sectors don't seem to have much to do with the two major positive news announced at noon."

"How can it not be related? If we want to boost the macroeconomy, shouldn't we first boost consumption? And to boost consumption, liquor and white goods are naturally the core."

"Isn't the 'new energy industry chain' line more stable under the favorable conditions?"

"That's for sure. I'm just worried that once the market opens, all the core and popular stocks in the 'new energy industry chain' sector will immediately hit their daily limit, and I might not be able to participate at all."

"That's true. In fact, if possible, we could place orders to buy at the daily limit up price now."

"Place a limit order at the daily limit up price to grab shares? There's no need for that. With such poor market sentiment this morning, even if the two positive news items at noon were somewhat beyond expectations, I think... there will still be relatively low buying opportunities at the opening of the afternoon session. There's absolutely no need to place a limit order at the daily limit up price to grab shares. If your favorite stock hits the daily limit up price with reduced volume in the afternoon, you still won't be able to buy it. If not... then placing a limit order at the daily limit up price is not very meaningful."

"I also think that hanging it 5 points higher is about right."

"Everyone, what about the 'major infrastructure' sector? What do you all think will happen this afternoon? I bought 'Huaxin Cement' this morning, and by midday, it was already down 10%. Is there any hope for it to recover today? I feel like if this stock doesn't recover, it's really doomed!"

"The trading volume of 'Huaxin Cement' after its initial surge was too large, basically the same as 'Huawen Online' yesterday. I feel it's over. Even if the market recovers in the afternoon, it will be difficult for this stock to recover with such a large trading volume. It will probably replicate the trend of 'Huawen Online'."

"It shouldn't be that bad. I feel the underlying logic of the 'major infrastructure' sector is still very strong. Moreover, the entire 'major infrastructure' sector showed great resilience this morning. If the market hadn't been so badly dragged down by the 'emerging industrial chain' sector, I think the 'major infrastructure' sector could have held up. I think if the overall market sentiment improves this afternoon, the popular stocks in the 'major infrastructure' sector will definitely have a chance to rebound. However... relatively speaking, small-cap stocks like 'Tianshan Cement' do have an advantage. The circulating shares of 'Huaxin Cement' are indeed a bit too large."

"I think if the 'major infrastructure' sector is to see any improvement this afternoon, we'll have to look at the stock of 'Oriental Yuhong'."

"Looking at the 'Oriental Yuhong' check? That can't be right, this check isn't really getting any attention today."

"If 'Oriental Yuhong' stock can turn positive this afternoon, that would be good enough. I estimate its upside potential won't be as high as some of the other popular stocks, and it's clear that this stock has already stalled."

"Forget it, let's focus on the 'new energy industry chain' as the main direction instead?"

"Do you think the 'new energy industry chain' will boost the entire 'emerging industry chain'? My entire portfolio is locked at the daily limit down, it's really tough. I really hope that the 'new energy industry chain' can truly boost market sentiment this afternoon."

"It's hard to say, but the number of stocks hitting their daily limit down will definitely decrease significantly in the afternoon, right?"

"The most crucial question is whether we should sell or buy if the market rebounds sharply at the opening in the afternoon. If we don't sell, we're afraid that after the sentiment is digested and the positive news is realized, the market will quickly fall back down. But if we sell, we're afraid that the market will go straight up with these two positive factors, which would really mean cutting our losses before dawn."

"My advice is to continue holding the position and observe."

"I'll definitely increase my holdings. I think the target should be the 'new energy industry chain' sector. With this favorable policy from the government, even if the 'new energy industry chain' sector doesn't perform well, it will still be hyped up by the major players in the market for a few days. If we make good use of these few days, I feel it will be enough to turn today's losses into profits."

"It's easier said than done!"

"Sigh, I'm basically stuck here. I've put all my funds into the liquor sector."

"Given this positive news, I will actively buy."

"Actually, besides the positive factors, we still need to analyze the market's position itself. Currently, the market is in a fluctuating upward trend. I think as long as the Shanghai Composite Index does not fall back to 3000 points and continues to rise, there should be opportunities in any of the core themes of the market."

"Sigh, I hope so. We've suffered huge losses so far, I hope we can recover some of our losses."

As the lunch break progressed...

Stimulated by these two positive factors, discussions have taken place on major online stock investment platforms and in numerous private discussion groups.

It is clear that market sentiment is recovering.

The pessimistic sentiment towards the market is waning, and there are quite a few investors who are thinking of buying on the dip and increasing their positions when the market opens in the afternoon.

Thus, under this emotional feedback...

Soon, it was 1 p.m.

As soon as the two stock exchanges opened and the stock prices began to fluctuate, a large number of funds, both inside and outside the market, started frantically buying up shares.

More than a hundred stocks that hit their daily limit down were pried open in almost a minute, with half of them being broken.

The remaining half of the stocks that hit their daily limit down are also seeing a sharp decline in sell orders as bargain hunters continue to pour in.

The most attention-grabbing sector, the 'new energy industry chain,' saw a surge in popular stocks, with numerous funds snapping them up.

Among them, relatively popular stocks in the "new energy industry chain" such as 'Tianci Materials', 'Power Source', 'Shuguang Shares', 'Jiangte Motor', and 'Changan Automobile' were snapped up by a large amount of bargain-hunting funds the moment the market opened, hitting the daily limit. (End of this chapter)