China'S Stock Market Is Still Full Of Positive Energy Under The Background Of Negative Interest Rate.

For the current Chinese stock market, after the 7-8 month stock market crash this year, the confidence of the Chinese stock market was seriously dampened. Until September, with the digestion of the negative factors and the recovery of investor sentiment, the confidence of the Chinese stock market recovered a little, and the stock market index began to rebound.

Since September 2nd, the Shanghai composite index has rebounded nearly 8%, and the two financial business has started to grow. The volume of the market has started to rise to more than one trillion yuan, and the confidence of the stock market has begun to recover to some extent, and investors are starting to carry out the market.

Especially after the eleven golden week, this sign is even more obvious.

So the central bank's interest rate reduction is a big profit to the current Chinese stock market.

However, whether this positive move will enable the current Chinese stock market to enter the central bank's interest rate cut after the central bank's interest rate cut in November 2014 is of course uncertain, but it can stimulate market sentiment and the rapid recovery of investor confidence.

This should be affirmative.

Because in the current domestic financial market asset allocation shortage, the interest rate cut will further guide the risk-free interest rate downward.

Under the long trend of future risk-free interest rates, asset allocation of large categories will continue.

The upward trend of China's stock market remains unchanged.

Therefore, the reduction of interest rates may be a timely rain for the current Chinese stock market.

Next Monday (October 26th), before the Communist Party of China convened in the fifth Plenary Session of the 18th CPC Central Committee, the Central Bank of China cut interest rates suddenly. This will not only increase the momentum of China's economic growth in the downtrend, but also hope that monetary policy will exert itself to pave the way for the smooth start of the 13th Five-Year plan (2016-2020 years) beginning next year.

The Central Bank of China announced last night that it will reduce the deposit and lending rate by 0.25% and reduce the deposit reserve ratio by 0.5% from October 24th, while removing the ceiling on deposit interest rates.

In October 23rd, the people's Bank of China announced that from 24, the benchmark lending rate for one-year loans for financial institutions was reduced by 0.25 percentage points to 4.35 percentage points, and the one-year deposit interest rate dropped to 0.25 percentage points to 1.5 percentage points.

In addition, since today, the RMB deposit reserve ratio of financial institutions has been reduced by 0.5 percentage points, and some financial institutions have reduced the deposit reserve rate by 0.5 percentage points.

At the same time, commercial banks and rural cooperative financial institutions will no longer set the ceiling of deposit interest rates, basically liberalize interest rate control, and carry out the marketization of interest rates smoothly.

This is the second time in which China's central bank has cut interest rates and lowered interest rates in less than two months. The aim is to ensure economic growth and create conditions for economic growth next year, but it may also increase the pressure on RMB depreciation.

It can be seen that since November 2014, China

The rate cut has been reduced, and the interest rate has been cut 5 times for the 6 time. These policies have released a lot of liquidity to the market.

For the current domestic financial market, not only the interest rate of deposit and loan has been reduced to the lowest level in history, but also the interest rate of the whole financial market has dropped to the lowest level in history, and the interest rate of the ten year treasury bond with no risk interest rate has broken 3 to 2.

That is to say, under the continuous monetary policy of the central bank, the financing cost of the domestic financial market has been completely reduced, but at present, several major problems in the domestic economy have not been solved.

For example, it has lasted more than a year.

The downward pressure has not been alleviated by the easing of monetary policy of the central bank. On the contrary, the risk is still higher. In the third quarter of the year, GDP broke 7 to 6.9, which means that the pressure of China's economic growth will be bigger and bigger in the future.

So why does the pressure of economic growth in China become larger and larger? Actually, the most important problem is the serious problem of overcapacity and the slow adjustment of economic structure.

These are leading to the first three quarters of this year's fixed asset investment has been low growth, especially the real estate investment growth is down to the "3" level.

That is to say, because of the serious overcapacity, the desire for investment in private sector or private sector is very weak, and the current investment growth is basically supported by a large number of public infrastructure projects launched by the government.

This is also why the central bank's loose monetary policy has not made the real economy out of its predicament for a year.

The most important aspect of dragging down the weakness of private investment is slow progress in the de stocking of real estate.

We should see that after the central bank's interest rate cut has been lowered for a year, the domestic real estate market did not pick up until May. Its main performance was first tier cities and some second tier cities. However, the problem of over supply of the real estate market in cities below three lines is still ten points serious.

This makes many real estate enterprises gradually withdraw from the real estate industry, and real estate investment growth is getting lower and lower.

It is estimated that the reduction of the central bank's interest rate cut appears to be conducive to the real estate market to resolve the current serious inventory problem. But when many real estate markets lose investment value, housing investors are withdrawing from the real estate market, so it is not easy to let the current excess excess supply of real estate market go stock.