Driven by cyclical stocks, artificial intelligence and Xiongan concept, three major indexes of the A-share market hiked on Thursday. The SSE Composite Index hiked above the ten-day and 20-day average while the ChiNext Price Index stood above half-year average for the first time in 2017.
The SSE Composite Index closed at 3,268.43, up 0.68 percent. The SZSE Component Index closed at 10,653.73, 0.50 percent higher. The ChiNext Price Index closed at 1,833.40, 0.45 percent higher. The total turnover of Shanghai and Shenzhen stock exchanges reached 525.3 billion yuan, significantly higher than the previous day.
Driven by the surging prices of commodity futures, coal, nonferrous metals and other cyclical stocks opened higher yesterday and fluctuated at high levels for the whole day. For the coal sector, Huolinhe Opencut Coal Industry Corporation Limited of Inner Mongolia (002128.SZ) closed 10 percent higher for four straight days after trading resumption. The company previously announced that it would acquire electrolytic aluminium and thermal power assets from its controlling shareholders. For the nonferrous metals sector, individual stocks with zinc businesses led the hiking. Huludao Zinc Industry Co., Ltd. (000751.SZ) and Jianxin Mining Co., Ltd. (000688.SZ) soared by the daily limit of 10 percent while Yunnan Chihong Zinc & Germanium Co., Ltd. (600497.SH) hiked 8.04 percent.
In the futures market, the prices of contracted coking coal and SSE zinc soared by the daily limit yesterday. Some institutes are rosy about the hiking of relevant categories in the future. GF Securities believes that the demand for coking coal will increase slightly by November. Besides, due to the hiking price of overseas coking coal, the coking coal price will see certain fluctuations in the short term. In the medium to long term, with the advancing of new capacities and de-capacities, the supply will not increase in short term and the coal price is expected to fluctuate at medium to high levels.
Guotai Junan Futures is relatively optimistic about the zinc price in the future. It believes that the slower recovery of zinc supplies than the consumption recovery is the main contributor to the hiking zinc price. The zinc output in the second half may decrease due to environmental problems. There are still factors supporting the consumption of zinc. The infrastructure investment in China remains high while the property development, vehicles, electric appliances, equipment manufacturing and other industries are still booming.
Besides cyclical stocks, SZSE SME and ChiNext concept also performed well. Artificial intelligence sector outperformed. Chengdu Information Technology of Chinese Academy Of Sciences Co., Ltd. (300678.SZ) closed 10 percent higher for four straight days. The company is engaged in intelligent identification and analysis technology businesses. The stock price of Iflytek Co., Ltd. (002230.SZ) has been hiking recently. It fell after hiking to new high and closed 2.43 percent higher. It even hit 63.28 yuan during the trading session, hitting a new high. As a glamour stock on the SME board, the hiking stock price of Iflytek significantly boosted the artificial intelligence sector and even the whole SME board and the ChiNext Board.
The State Council released the plan on the development of the new generation of artificial intelligence recently, proposing the guideline, strategic targets, key tasks and guarantee measures for the development of the new generation of artificial intelligence by 2030. Analysts believe that as China is currently under the early period for the development of the of artificial intelligence and driven by favorable policies, technologies and their application will see rapid development and the market enjoys huge potential.
In addition, the 2017 World Robot Conference will kick off on August 23 in Beijing. It is learnt that more than 300 experts, scholars and business leaders will participate in the conference. They will conduct academic exchanges on artificial intelligence and other key topics.
Xiongan concept remained recovering yesterday. China Zhonghua Geotechnical Engineering Group Co., Ltd. (002542.SZ) soared by the daily limit of 10 percent in the afternoon and boosted the whole sector. Shanghai Tongji Science & Technology Industrial Co., Ltd. (600846.SH) hiked by the daily limit of 10 percent in the closing session. Cangzhou Dahua Co., Ltd. (600230.SH) and Bosun Tools Co., Ltd. (002282.SZ) closed over 6 percent higher. The homegrown software sector also performed well. Shanghai 2345 Network Holding Group Co., Ltd. (002198.SZ) and Inspur Software Co., Ltd. (600756.SH) closed over 5 percent higher. Satellite navigation, smart city, professional education and other sectors also performed well.
TF Securities believes that there are no signals on systematic risks in the market currently. Investors are advised to grasp the recovery in the third quarter. They are advised to make balanced investment. Cyclical stocks to benefit from the supply-side reform, consumer stocks with value matching the performance and growth stocks may perform well in the second half.
Translated Star Zhang
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