The three major A-share indexes opened lower and fell yesterday, with the Shanghai Composite Index and the ChiNext wiping out last Friday's gains. As of the close on September 2, the Shanghai Composite Index fell 1.1% to 2811 points, the Shenzhen Component Index fell 2.11%, and the ChiNext fell 2.75%. Over 4400 stocks fell, with a total turnover of 705.7 billion yuan for the day, a decrease of 170.9 billion yuan from the previous trading day.

In Hong Kong, on Monday of this week, the Hang Seng Index closed down 1.65% at 17691.97 points, the Hang Seng Tech Index fell 2.08%, and the Hang Seng China Enterprises Index fell 1.89%.

From the perspective of ETF fund flows, on September 2nd, the top 10 ETFs with net inflows of funds were Huaxia Fund Sci-Tech 50 ETF, Bosera Fund Convertible Bond ETF, Guotai Fund Securities ETF, Guolianan Fund Semiconductor ETF, E Fund Star 50 ETF, Morgan Fund CSI A50 ETF Index Fund, Huaxia Fund Shanghai A50 ETF, Fullgoal Fund CSI 300 Index ETF, GF Fund Hong Kong Innovative Medicine ETF, and China Merchants Fund Treasury Government and Policy Financial Bonds ETF. They received net inflows of 0.485 billion yuan, 0.325 billion yuan, 0.173 billion yuan, 0.152 billion yuan, 0.128 billion yuan, 0.08 billion yuan, 0.076 billion yuan, 0.075 billion yuan, 0.063 billion yuan of funds on September 2nd.

On September 2nd, the top 10 ETFs with net outflows of funds were Yinhua Fund Exchange Traded Money Market Fund-A, 500 ETF, China Southern CSI 1000 ETF, Hwabao WP Listed Money Market Fund-A, HFT CSI Short-term Financing ETF, Huaxia 300 ETF, China Southern CSI 1000 ETF Index, Gold ETF, E Fund SSE 50 ETF, and E Fund CSI 300 ETF. They received net outflows of -2.065 billion yuan, -1.084 billion yuan, -0.867 billion yuan, -0.81 billion yuan, -0.659 billion yuan, -0.243 billion yuan, -0.223 billion yuan, -0.163 billion yuan, -0.159 billion yuan, -0.118 billion yuan of funds on September 2nd.

The disclosure of A-share interim reports has officially come to an end. According to Wind data, in the first half of 2024, the total operating income of A-share listed companies was 34.87 trillion yuan, a year-on-year decrease of 0.51%; the net income attributable to shareholders was 2.9 trillion yuan, a year-on-year decrease of 3.09%. Looking at comparable quarterly data, in the second quarter of 2024, the operating income of A-share listed companies decreased by 1.21% year-on-year. As for net income attributable to shareholders, in the second quarter of 2024, A-share net profit decreased by 1.40% year-on-year, an increase of 3.35 percentage points from the first quarter.

Looking ahead to the A-share market in September, industry insiders believe that the current A-share market has many characteristics of a bottom, and under the joint promotion of policy intensification and other factors, the marginal recovery of investor sentiment is expected to promote a phase stabilization of the market.

Guosen Securities believes that the current macroeconomic trend is stable, and the performance growth of non-financial listed companies in the future interim report is expected to rebound. The basic fundamentals of A-shares are expected to rebound strongly. In the future, macro-stabilization policies may continue to be strengthened, driving the recovery of A-share performance, boosting market confidence, and promoting the rebound of the broad market index in a volatile environment.

In terms of industry rotation, firstly, the 2024 interim report shows that the financial sector's performance exceeds expectations, and financial stocks have a higher dividend payout ratio. In the case of overall low market investment sentiment in the short term, the investment heat in the financial sector is expected to remain high. Secondly, recently, the consumer electronics industry is expected to introduce new products, which may drive the outbreak of related thematic trends. Thirdly, it is expected that the Federal Reserve's interest rate cut cycle will begin, and overseas liquidity is expected to improve. Combining historical analysis, upstream resource industries in A-shares such as petroleum, petrochemicals, nonferrous metals, basic chemicals, and coal may benefit from the price increase of international commodities before and after the opening of the Fed's interest rate cuts.

Huaxi Securities research report points out that progress is made step by step. In September, there are more positive signals in the A-share market. First, the opening of the overseas Federal Reserve interest rate cut cycle and the relatively strong trend of the RMB create domestic policy space. Second, after the release of corporate interim reports, the downward pressure on market profit expectations is temporarily reduced. Third, August PMI data indicates a further weakening of economic vitality, and incremental policies are expected to be strengthened, which may improve market risk appetite.

According to the calendar effect, September faces the Mid-Autumn Festival and the National Day holiday, and there may be a tendency for funds in the stock market to seek safety during this period. Looking back from 2019 to 2023, the A-share market often experiences a period of volume contraction before the National Day holiday, and in 2022 and 2023, there was a significant decrease in volume at the end of September. Funds tend to seek safety before the long holiday. The prosperity of the real estate industry is still a core factor restricting the A-share market, and consolidation at the bottom is still needed in the medium term, waiting for incremental policies to catalyze. For September, A-shares may continue to see inflow of existing funds.