The weather in summer is unpredictable and erratic—sometimes thunder roars and torrential rain pours down, while at other times the sun shines brightly in a clear blue sky.
The main board (Big A) was no different. In early trading, there was extreme pessimism leading to massive sell-offs, but half an hour later, like the face of Sun Wukong, it suddenly turned extremely optimistic. This encapsulated last week's market volatility in a single day.
Kweichow Maotai once plummeted by 3.4%, with its share price nearing 1,600 yuan, but it eventually surged by 4.5%, breaking through the 1,750-yuan mark, with its market cap fluctuating by a whopping 170 billion yuan. Take Tongce Medical, for example: it fell to the daily limit at one point during trading but ended up with a more than 3% increase, showing a fluctuation of 13%. Other large-cap stocks such as舍得 (舍得酒业), Jiugui Liquor, and Bloomage Biotech also staged strong rebounds. However, CATL, which had surged by 4% in early trading, plunged to -3% in the afternoon, ending with a modest 0.29% gain. Of course, a number of smaller stocks followed suit and nosedived.
A retail investor raised a soul-searching question: Why does the A-share market experience such wild ups and downs?
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Reasons Behind the Wild Swings
Chinese institutions dominate market discourse, but their investment mechanisms and philosophies have significant issues (for instance, focusing only on short-term rankings). They chase short-term price differences rather than long-term stable returns.
Currently, institutions have evolved into trend-following herds. For example, before the Lunar New Year, they heavily piled into liquor stocks and leading companies across various sectors, pushing stock prices sky-high in a very short time. Then came the disastrous aftermath post-holiday. This year, institutions aggressively pursued new energy vehicles, photovoltaics, and semiconductors, creating a noticeable money-making effect that formed a positive feedback loop. Within just a few months, some stock prices doubled, tripled, or even increased tenfold.
Over...