The 11 Countries' Stock Market Plummeted. Will A Shares Be Affected?

Yesterday, the global financial market plummeted, the situation was miserable, how tragic?


According to incomplete statistics, there have been "melting and breaking" on the 12 day of the 11 national stock markets, including the US stock market, the Brazil stock market, the Thailand stock market, the Philippines stock market, the Pakistan stock market, the Korean stock market, the Indonesian stock market, the Mexico stock market, the Columbia stock market and the Sri Lanka stock market. If the Kuwait stock market, which has been fusing in the previous trading day, has been triggered by a sharp fall in the stock market of 12 countries in the past week.


In March 12th, it will become a "global stock market melting day" that bears witness to history.

The three time in the history of the US stock market has been two times this week.


"Fusing", a professional term for professionals in the financial market, has become the most frequent "unknown" keyword in the global media coverage this week, and is quickly known by science and Internet users.


Affected by the spread of the global new crown pneumonia and the impact of the oil price war, global stock markets have plummeted. This week, "fusing tide" is coming.


US local time on Thursday, March 12th, opened only 5 minutes, due to the standard & Poor's 500 index fell 7.02%, triggering market melting mechanism, U.S. stocks stopped for 15 minutes. This is the third time in the history of the US stock market.


According to media reports, there are market traders joking: the history of US stock melting has only happened three times. The last fusing also dates back to March 9, 2020. My memory was very deep that day, just like a few days ago.


Indeed, the first real melting point in US stock history was in October 27, 1997 when the Dow Jones Industrial Average fell 7.18%. 23 years later, that is, on March 9, 2020 (Monday), the United States only experienced the second time in history. On the 9 day, the 500 index of the S & P 500 of the US stock market fell by 7%, triggering the fusing mechanism.


Outside the US stock market, the 10 countries' stock market is now "fusing" on the 12 day.


Subsequently, the collapse of the US stock market triggered the spread of the fusing panic to the global financial market. The stock market "fuse" began to become popular. On the 12 day, it was a concentrated outbreak. Besides the US stock market, there were 10 countries whose stock market triggered a fusing mechanism due to a sharp fall.


For example, on the 12 day, the stock index of Brazil dropped 12%, triggering third fuses this week, and after the resumption of trading, it fell 15%. The stock index of the Toronto stock exchange in Canada fell 9.17%, once again triggered by a sharp fall in the first market and suspended trading.


In addition, in March 12th, the Colombo stock exchange in Sri Lanka suspended trading for 30 minutes, which is not the first time that Colombo has stopped trading this week. In March 10th, the S & P 20 index dropped 5% soon after opening. The Colombo stock exchange immediately suspended trading for 30 minutes in early trading.


On the same day, the Thailand Stock Exchange (SET) announced that as at 14:38 on March 12th, the stock exchange index fell 125.05 points (-10.00%) at 1124.84 points, causing the Thailand stock market to trigger a fusing mechanism and suspend trading for 30 minutes, from 14:38 to 15 at 08 minutes. This is the first time since October 27, 2008, 11 years and 4 months, the stock market in Thailand has triggered a fusing mechanism.

In addition, in March 12th, the Korea composite index 200 (KOSPI200) index futures plunged more than 5% on the 12 day, resulting in a 5 minute suspension. This is the first time that the Korean stock market has temporarily suspended its trading since October 2011. On the same day, Indonesia's stock market fell more than 5%, triggering a stop trading mechanism.


On March 12th, the Philippines stock market closed at 5736.27 points, or 9.7%, down 616.99 points, the biggest decline since October 27, 2008. Around 14:53 p.m. that day, the stock market triggered a fusing mechanism. This is the second time since the establishment of the Philippines stock market in 2008, the first time it was in October 27, 2008.


Is it a financial crisis that global stock markets have collapsed?


In fact, not just fuses, the MSCI global index fell more than 20% against the peak of February, and entered a technical bear market. The MSCI index is the benchmark index used by global portfolio managers.


On the 11 day, the WHO (WHO) first identified the new coronavirus epidemic as a pandemic. The Chicago Mercantile Exchange, which is more than 1200 kilometers away from Wall Street, has announced that it will close the Chicago trading hall after Friday's closing and reduce staffing. At that time, all products of Chichi will continue to trade on platform CMEGlobex.


Market analysts warn that more shocks will follow. "We are witnessing the end of the bull market."


In March 12th, the three major U.S. stock indexes closed down more than 9.4%, the largest single day decline since October 1987. Among them, the Dow Jones index closed down 2352.60 points, or 9.99%, at 21200.62 points, the NASDAQ index closed down 750.25 points, or 9.43%, reported 7201.80 points; the S & P 500 index closed down 260.74 points, or 9.51% points, reported 2480.64 points.


Alan Brand, the former vice chairman of the Federal Reserve and economist AlanBlinder, said that the US economy may have been in recession in the wake of the new crown pneumonia epidemic. "I will not be surprised if we review the data later and finally determine that the recession began in March."


At present, US stocks have fallen by more than 20%, entering the technical bear market. There is a view that the bull market for 11 years will end. Investors generally believe that a 20% decline in the stock market is a sign that the US stock market has entered a bear market. This development is often accompanied by long-term pessimism and more downturns.


WillKinlaw, an economist at Dao Fu bank, said that with the decline in US stocks, the possibility of an economic recession in the United States rose to about 75%. If the US shares reacted to the full gains in the past 12 months, the possibility of a recession in the US economy would rise to 80%.


However, President Trump said in his 11 national speech, "this is not a financial crisis. It is only a brief moment. We must unite to overcome this epidemic." Trump also announced that the US government will take measures to boost the economy so as to ensure that this is not an economic crisis.


Can A shares become a haven?


The collapse of international stock market and the ability of A shares to remain single are still the main concerns of domestic investors.


In March 12th, the Shanghai stock index fell 1.52% to 2923.49 points, the Shenzhen index dropped 2.31% points to 10941.01 points, and the gem index fell 2.64% to 2045.93 points.

"China's economy is better than that of overseas economies, and there are certain hedging characteristics of RMB assets. Domestic capital markets, including A shares, will perform better than overseas markets." Pan Xiangdong, chief economist of new era securities, told reporters, "but we must be vigilant. If the overseas economy goes down sharply, it may lead to further damage to China's industrial chain and exports, and impact on China's economy and A shares."


"With the start of resumption and resumption of production, the Chinese generals will take the lead in the global economic recovery. The function of A share market will also be reflected in the medium and long-term allocation. Huaxin Securities believes that March will be a market trend. Because of the high uncertainty of the peripheral market, there may be a panic market, but it is not sustainable. Instead, it is an opportunity for layout.