Witnessing the Shanghai Composite Index plummet by 8.49% in a single day, the stock index futures hitting their daily limit across the board, and the extremely tragic scene of over 1,700 stocks hitting their daily limit.
Even though Su Yi had experienced this before his rebirth, he still found it incredibly shocking.
This round of 'Stock Market Crash 2.0' came extremely swiftly.
It began on the second trading day after he cleared his positions and locked in profits on the 'Meiyan Jixiang' stock.
Under the influence of multiple negative news, including the finalized July PPI and industrial production values released by the US falling severely short of expectations, the Federal Reserve hinting at a September interest rate hike igniting the market, major securities companies resuming short selling T+1 trading, and market rumors that 'Zhengjin' company would transfer stocks and cease market intervention.
Almost overnight, the Shanghai Composite Index suddenly crashed from around 4000 points, once again revealing the market's liquidity crisis.
August 18th, August 19th, August 20th...
Up until now, August 24th, not a single trading day has ended without a sharp decline.
Many stocks in both markets, including numerous large-cap weighted stocks, have shown nothing but steep falls, steep falls, and even steeper falls during this period.
Among them, many concept-themed stocks.
Especially stocks in the 'Internet Finance', 'Internet Software', and 'Film and Television Media' concept mainlines, which were heavily speculated by institutional funds during the previous bull market, have basically experienced continuous daily limits in this round of the stock market crash, showing a halving trend with no capital taking over.
And this trend, so far, shows no sign of ending.
Investors who failed to escape in advance and were trapped in the market, whether institutions, speculative funds, big investors, small investors, or retail investors... all suffered heavy losses, with their wealth taking a devastating blow.
Even if regulators cleared off-exchange margin financing in advance and cut off the trading channels for off-exchange margin financing.
However, with a total margin financing scale of over 1.8 trillion yuan in both markets.
Every day, countless investors are still facing forced liquidations.
In just about a week, the entire market saw ten trillion yuan in wealth annihilated, directly crushing all long-side confidence and capital absorption confidence in the market.
Despair, despair...
Investors participating in the market are in despair every single day.
They see no hope at all.
And wonder where this round of stock market crash will end?
Regulators continue to explain and release positive news, but facing a market that has completely lost liquidity, no one believes anymore, and no one thinks that positive news alone can save the current stock market.
"How many times has it been with a thousand stocks hitting their daily limit?"
Facing the extremely brutal closing situation in both markets, someone in Su Yi's 'Modu Ultra-Short Gang' main speculative fund internal group asked.
"I can't remember how many times, it feels like we're making history every day anyway."
"Sigh, the stocks I took over earlier have hit the daily limit five times in a row. Every day is a limit-down with no volume, nowhere to escape, the losses are truly heavy."
"Can 'Zhengjin' no longer support the market?"
Old Zhang from 'Xinzhalu' said in the group.
"Margin financing balance is 1.8 trillion yuan, with tens of trillions of yuan in trapped positions and stop-loss orders above. Everything is collapsing. Even if 'Zhengjin' has trillions of yuan in credit lines, it can't hold it, nor does it dare to."
Xu Qiao responded helplessly,
"I'm also trapped with 20% of my positions in there, damn it... it's hitting the daily limit every day, it's possessed."
Old Wu from 'Yintailu' also said at this moment,
"This market is truly desperate. At one point, there were fewer than 10 stocks in the red on both markets. Can you believe it?"
"I remember at 9:36 AM, there were only two stocks in the red at their lowest point."
Brother Chen from 'Xinyuelu' said,
"Sigh... looking at this pattern, 3000 points might not even hold tomorrow."
"Brother Chen, you must have completely avoided this round of stock market crash, right?"
Xu Qiao asked.
Brother Chen from 'Xinyuelu' said,
"My hands were itchy, I bought some chips at the bottom last Friday, and today I took a full daily limit hit."
"Sigh, a friend of mine was heavily invested in 'Dongfang Caifu' this round, and is about to face forced liquidation."
Old Zhang from 'Xinzhalu' said,
"This round of stock market crash is even more fierce than the last one."
"So, no matter what, no matter when, you can't heavily invest in a single stock."
Brother Chen from 'Xinyuelu' said,
"Otherwise, facing such extreme market conditions, there's truly nothing you can do."
"Speaking of which, I have to mention Brother Su's timely exit by clearing positions and locking in profits this round, truly classic."
Xu Qiao said,
"He happened to sell just before the market crashed."
Since Su Yi sold 'Meiyan Jixiang'.
The stock's price has now halved from its peak.
Moreover, the funds from 'Huatai Securities Shenzhen Yitian Road Rongchao Business Center Branch' that took over for arbitrage at the peak haven't been able to completely escape even now.
"Brother Su's luck is truly good."
Old Zhang from 'Xinzhalu' couldn't help but sigh.
Su Yi watched the messages refresh in the group but did not reply.
After observing everyone's emotional reactions for a while, he closed the group messages.
And besides the 'Modu Ultra-Short Gang' main speculative fund internal group he was in.
In other major investor communities, especially stock discussion groups, stock investment forums, communities, and Tieba where retail investors gathered.
Everyone's emotions were even more pessimistic and extreme.
Because 'Guotai Junan Securities' published a severely bearish analytical report on the stock market, the stock review sections of its major trading platforms have been overwhelmed by countless retail investors needing to vent their emotions.
'Huaxin Securities' was found by investigators from the Ministry of Public Security, assisting the China Securities Regulatory Commission, to have engaged in malicious short selling.
Its internal personnel have been widely condemned by retail investors, topping trending searches.
Among them, the stocks 'Huaxin Securities' and 'Guotai Securities' firmly occupied the top two spots on the hot stock list in both markets amidst overwhelming criticism.
In various online discussion areas where countless retail investors gather, the topic of forced liquidations is becoming increasingly prevalent.
Offline, panic among major financial institutions is also escalating.
Brokerage firm agents' phones haven't stopped ringing, all urging margin financing clients to replenish their collateral or informing them that their accounts are about to be forcibly liquidated.
For fund companies, countless private equity managed fund products have fallen below their mandatory liquidation lines.
Many institutional fund products even have net asset values below 0.3 or 0.2.
Major commercial banks are also continuously assessing the current value of stocks pledged by listed company major shareholders, reminding and urging them to supplement their collateral to prevent the value of pledged stocks from falling below the loan amount and being forcibly liquidated.
The entire domestic financial market.
From institutional groups like banks, brokerages, and fund companies, down to individual investor groups like speculative funds, big investors, small investors, and retail investors, as well as countless off-market fund investor groups, and many major shareholders of listed companies who heavily pledged their equity for financing... at this moment, all are in panic.
Stock index futures are hitting their daily limit, stocks are hitting their daily limit, and indices are hitting their daily limit.
Countless related fund products and derivative financial products, both on-exchange and off-exchange, are also experiencing continuous sharp declines due to loss of liquidity.
99% of on-exchange graded funds have undergone downward reclassification, causing countless investors in B-class graded funds to lose all their capital.
Over 80% of stocks have lost liquidity, with no buying support on the trading floor.
70% of investors are so deeply in the red that they dare not open their accounts.
60% of margin investors are on the verge of forced liquidation.
The over 1.8 trillion yuan in margin financing in both markets, in a continuous stock market crash where the market has lost liquidity, is like a financial nuclear bomb under panic, destroying the entire market's ecological structure.
In the evening, regulators continued to release positive news.
Huajin Institute stated it would severely crack down on abnormal trading and further raise stock index futures trading margins.
The China Securities Regulatory Commission spokesperson encouraged major shareholders to increase their holdings.
'Zhengjin' and 'Huijin' continued to respond to market rumors, stating that no so-called exit mechanism has been formulated, and they would not sell stocks.
The State Council officially released the "Investment Management Measures for Basic Pension Insurance Funds," allowing pension funds to enter the market.
The Ministry of Public Security reported several cases of malicious short-selling investigated in cooperation with the CSRC over the past month, and formally arrested several key personnel within the financial system.
However, the multiple positive developments.
Did not quell the anger in the hearts of countless investors across the market.
Nor did it dispel the extreme panic in everyone's minds or restore confidence in going long in the market.
The next day, August 25th, Tuesday.
Despite the positive news, both markets continued to open significantly lower and fell sharply, with a thousand stocks hitting their daily limit again.
Among them, the Shanghai Composite Index closed below 3000 points, completely shattering the last glimmer of hope in the hearts of all investors.
After closing, facing a market that was already a 'systemic financial crisis', and financial risks ignited by the stock market sweeping across the entire domestic financial system like a hurricane.
The central bank, under duress and despite the expectation of a September Federal Reserve interest rate hike, once again unleashed a major move.
It continued to lower deposit and loan interest rates for financial institutions, cutting interest rates by 0.25% and reducing the reserve requirement ratio by 0.5%.
Under the central bank's stronger-than-expected interest rate and reserve requirement cuts, on August 26th, Wednesday, the market finally saw a brief high open.
Unfortunately, this high open only lasted for a few short minutes.
Immediately, under trillions of yuan in panic selling, both markets once again crashed and fell sharply.
The Shanghai Composite Index plummeted almost in a straight line, falling below 2900 points and touching as low as around 2850 points.
Seeing that the market's liquidity crisis and 'systemic financial risks' had not been resolved.
At the midday close, the Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission jointly released major positive news to the market, issuing a joint notice stipulating that market investors holding stocks for more than one year would be exempt from individual income tax.
As a series of major positive developments followed one after another.
Finally, in the afternoon, when the market reopened for trading, both markets saw a turning point.
A group of weighted stocks in financial, infrastructure, consumer, and power sectors, among others, saw massive capital buying after sentiment brewed during midday.
All at once, all blue-chip and white-horse stocks that met long-term investment logic.
With performance and fundamental support.
All surged violently, driving the Shanghai Composite Index to quickly turn red and rise from a more than 3-point intraday decline, powerfully reversing the market's steep fall.
(End of Chapter)
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