Hong Kong and US stocks are “on vacation” during the Christmas holidays, yet A-shares have not come out “alone and beautiful.”

On December 26, the Shanghai Index had repeated friction back and forth between 2,900 points in the intraday period, closing down 0.68% to 2898.88 points. 2023 is coming to an end. The Shanghai Index has accumulated a cumulative decline of more than 14% since its high in early May during the year.

The GEM index fell 1.26%, the Shenzhen Stock Exchange Index fell 1.07%, and the Science Innovation 50 fell 1.43%; the Beijing Stock Exchange 50 broke out of a deep “V” in the afternoon. It had previously fallen by more than 2% in the intraday period, then rebounded and closed up 1.38%.

Risk aversion is heating up again

The overall decline in A-shares, and the rotation of market styles is also intensifying. Today is another day of major adjustments.

Judging from today's market, the synthetic biotechnology, and fertilizer sectors were strong throughout the day; precious metals were active. Among them, Shandong Gold rose more than 2%, while Yintai Gold, CICC Gold, Chifeng Gold, and Zhongrun Resources followed suit.

In the Asian market today, spot gold also suddenly soared more than 10 US dollars in the short term, breaking through an important short-term resistance of 2,060 US dollars/ounce in one fell swoop. Currently, trading is around 2,063 US dollars/ounce.

Today, geopolitical conflicts continue to fuel the rise of safe-haven gold.

According to a new piece of heavyweight news from Russia and Ukraine, in the early morning of December 26, local time, there was a sudden explosion in Crimea, and Ukraine attacked the Feodosia region.

Currently, unrelated personnel have been banned from entering the local port area, explosions caused by ammunition have stopped, and the fire has been brought under control. All relevant departments are working on site. Residents of some houses will be evacuated.

Ukrainian Air Force Commander Oreshchuk announced that the Ukrainian military is responsible for the air strike in Crimea and Feodosia.

Apart from the Russia-Ukraine conflict, the Palestinian-Israeli conflict continues to ferment.The Likud Group, led by Israeli Prime Minister Binyamin Netanyahu, issued a statement on December 25 saying that while attending the Likud Group meeting on the same day, Netanyahu saidIsrael's military operations in the Gaza Strip are far from over.The Israeli army will step up its offensive in the next few days, and the fighting will continue for a long time.

Colin Cieszynski, portfolio manager and chief market strategist at SIA Wealth Management, said that this week's gold price may be sensitive to a resurgence in safe-haven demand.

He pointed out that as the turmoil in the Red Sea intensifies and the conflict between Ukraine and Gaza continues, geopolitical uncertainty has increased, and there are not many factors needed to push investors to use gold as a safe haven asset.

Also, after the weak US PCE inflation data, the market's expectations that the US will probably start a cycle of interest rate cuts in 2024 are getting stronger, and the price of precious metals is also likely to usher in a large market.

Coal stocks failed to break through

There is not enough momentum for game stocks to rebound

Judging from the direction of A-share adjustment, the short-term market mentality is mainly defensive. Today, coal stocks tried to break through strongly, but in the end they failed.

In early trading, the leading stock, China Shenhua, once rose more than 2%, hitting a new high since June 2008, then declined sharply. It closed down 1.42% to 31.31 yuan, with a total market value of 622.083 billion yuan.

In terms of demand, due to the impact of a new round of strong cold air, extreme cold weather has hit many parts of the country, and demand for coal driven by heating continues to rise; on the supply side, due to the heavy cooling of the cold tide, production capacity restrictions in some open-pit coal mines in major production areas are compounded by equipment maintenance at the end of the year, leading to marginal contraction in production.

According to Shouchuang Securities,Demand has rebounded due to limited production capacity, and it is expected that thermal coal prices will continue to be strong.

On the other hand,In recent days, game stocks that have been “heavily hammered” have shown signs of a rebound, but clearly lack momentum.

After the publication of the “Online Game Management Measures (Draft for Comments)”Gaming stocks were raging all over the country. As a result, various sectors such as AI, media, software, communications, and Internet services fell, and the entire A-share market was attacked.

But just yesterday,The State Press and Publication Administration launched “Additional Release”.Within three days from the 22nd to the 25th of this month, the State Press and Publication Administration announced the approved versions of two batches of games. A total of 203 games were approved.

This includes 98 imported game versions and 105 new domestic game versions (102 mobile games), setting a new monthly high this year.

Up to now, a total of 1,075 game versions have been distributed in 2023, including 977 games made in China and 98 imported games; the total number of games distributed has doubled since last year (512 games distributed throughout 2022).

Echoing the “warm air” of the version policy,Game company chairmen collectively set off a “wave of proposals” for repurchases.

Over the past few days, a number of listed companies have issued announcements such as share repurchases, increased shareholders' holdings, and acquisition of product versions to send positive signals, injecting “strength agents” into the market with real money and solid management.

In response, Guohai Securities pointed out that with the smooth release of imported and domestic versions in December, the regulatory authorities 'stance on promoting the prosperity and healthy development of the industry and stabilizing confidence in the industry can be seen, and a large number of companies in the gaming and media sector have been killed by mistake.

What is the next keyword for A-shares?

After continuing to suffer setbacks, how will the A-share market go next?

CICC believes that the current valuation level and trading sentiment in the A-share market are close to historical extremes, and there is limited room for decline. From the end of this year to next year, the direction and intensity of domestic policies and reforms, the economic recovery process, and the inflection point in US bond yields may have an impact on the pace of the A-share market. It is expected that the performance of the A-share index may rise steadily in 2024.

As far as investment opportunities are concerned, manufacturing and technological innovation are the long-term main lines of market recognition, and technology and pharmaceuticals are key words in institutional strategy.

Guojin Securities saidIn the 2024 A-share allocation strategy, there is both rotation and perseverance.

First, find a path of industrial trends, representing the direction of economic structural transformation. Those with industry trend investment opportunities include smart cars, driverless driving, consumer electronics, mechanical automation, innovative drugs, CXO, military, etc., and establish a “rising” penetration rate in the technology industry and a leading screening framework; second, prepare “cold protection” defensive varieties, including pharmaceuticals, gold, high dividends, finance, etc.; third, the “quadrant” strategy for theme investment, sorting out rotating signals and allocation suggestions in the six major fields of growth.

Great Wall Securities believesThe market is likely to enter a phased rebound window,Look for the direction with the least resistance.

The agency pointed out that the pharmaceutical industry is in a low position, many disadvantages are gradually disappearing, and there is huge room for future innovation, R&D and development. It is a pharmaceutical segmentation circuit with medium- to long-term investment value under an aging population, etc.; the media, the direction of artificial intelligence represented by AI has long-term certainty of industrial transformation, and early adjustments are sufficient, and performance is expected to gradually materialize in the future.

The game industry is expected to continue to benefit from marginal improvements in fundamentals and sector valuation increases brought about by the implementation of AI applications; in the field of scientific and technological innovation, the focus is on the high elasticity of technological innovation, demand recovery, and long-term economic logic. It includes the Huawei industry chain, semiconductor storage, consumer electronics, automotive intelligence, liquid-cooled rapid charging, military industry, etc.

In terms of themes, the China Special Valuation+Dividend sector is the “policy support industry+high market capitalization+dividends”. It is the preferred investment choice for marginal safety during the period of solid rebound.