The Stock Market Is Now In A Big Rally, And Traders Are Having A Big Eye.

In January 7th, on the fourth trading day of 2016, it was only 2 trading days away from the previous market triggered fuses. No one expected that the A share market would trigger the fuse threshold again and suspend trading all day.

A shares started to fuse 13 minutes after opening. After 9:59, they suspended trading for second days due to second triggering fuses. The cumulative trading time was only 14 minutes, and nearly 2000 stocks were down.

After the two fuses, the Shanghai Composite Index and Shenzhen stock index respectively closed at 3115.89 points and 10745.47 points, down 7.32% and 8.35% respectively.

The gem index has fallen by 8.66%.

The Shanghai and Shenzhen 300 index fell 7.21%.

All day, trading 857 seconds, the market value evaporated 3 trillion and 860 billion 415 million yuan, an average evaporation of 4 billion 505 million per second, and per capita float 38952.62 yuan.

Up to now, this week (from January 4th to 7th) market value evaporated 7 trillion and 35 billion 336 million yuan, per capita loss 70988.42 yuan.

In the light of widespread doubts about the fusing mechanism, the Shanghai Stock Exchange, Shenzhen Stock Exchange and CICC decided to suspend the implementation of the index fusing mechanism from January 8th.

Zhang Gang, a strategist at Zhongyuan securities, said that after 7 days of melting, all parties were looking for measures to suspend or perfect the fusing mechanism.

Today, confirming the suspension is a good news for the stock market.

It is estimated that after two days of adjustment, there will be a big rebound in the market on the 8 th.

However, if

If the intensity is too large, the index will be easier to break down. Under the pressure of RMB depreciation and fund adjustment, the sustainability of the market will remain to be verified.

In the medium term, it is expected that regulators will defuse the small cap stocks, and with the advance of the supply side reform, the introduction of favorable policies in real estate and nonferrous metals industries is expected to drive new investors into the market. It is expected to drive a new market and the stock market will achieve a bottom up.

He Chengying, deputy director of Guoxin Securities Research Institute, said that the abolition of the fusing mechanism may be what the market expects. After all, hitting the threshold frequently within 4 days means that the introduction of this mechanism may not be able to prove the depth of the argument, and investors have seriously suspected their effect.

If we continue to hit the threshold in the short term, there may even be a systemic risk.

Dong Dengxin, director of the finance and Securities Research Institute of Wuhan University of Science and Technology, believes that the fusing mechanism is not acclimatized, and that mistakes are corrected. This is also a process of trial and error and error correction.

The Shanghai stock exchange, the Shenzhen stock exchange and the China Financial Futures Exchange announced on the 7 night that in order to maintain stable operation of the market, the China Securities Regulatory Commission (CSRC) approved the implementation of the index melting mechanism since January 8, 2016.

A spokesman for the securities and Futures Commission, Deng Ge, said that the main purpose of introducing the index fusing mechanism was to provide a "cooling off period" for the market, to avoid or reduce the hasty decision making under the circumstances of large fluctuations, to protect the legitimate rights and interests of investors, especially small and medium-sized investors, to restrain the help up and fall effect of procedural pactions, and to provide emergency disposal time for dealing with technical or operational risks.

He said,

It is not the main cause of the market crash. However, from nearly two actual fuses, it does not achieve the expected effect, and the fusing mechanism has a certain "magnetic attraction effect", that is, some investors are trading ahead of time when the threshold is approaching, which leads to the acceleration of the index to touch the fusing threshold and plays a role in helping to fall.

Weighing the pros and cons, the negative effects are greater than the positive ones.

Therefore, in order to maintain market stability, the SFC decided to suspend the fusing mechanism.

Deng Ge said that the introduction of the fusing mechanism started after the abnormal fluctuations in the stock market in 2015, and the relevant proposals were carefully demonstrated and publicly consulted.

The fusing mechanism is a brand new one.

In China, there is no experience in China, and market adaptation should also have a process, which needs to be gradually explored, accumulated experience and dynamic adjustment.

He said that the next step, the SFC will conscientiously sum up experiences and lessons, further organize relevant research and improvement programs, solicit opinions from all sides, and continuously improve relevant mechanisms.