A-share Midday Review: All Three Major Indices Rise Collectively, Over Ten Defense Stocks Hit Limit Up, PCB Concept Pulls Back
On October 16, the three major A-share indices opened higher collectively before diverging. The ChiNext Index and Shenzhen Component Index opened high, dipped, and then rebounded on a震荡 basis. The market displayed an active pattern of "indices rising collectively, hot spots rotating rapidly, and defense sector surging unilaterally." As of the midday close, the Shanghai Composite Index rose 0.95%, the Shenzhen Component Index gained 1.19%, and the ChiNext Index advanced 0.96%. More than 4,800 individual stocks across the market rose. Half-day trading volume in the Shanghai and Shenzhen markets reached 962.6 billion yuan, a decrease of 19.2 billion yuan from the previous trading day.
On the capital flow front, main funds in the morning session recorded net inflows into electronics, semiconductors, and pharmaceuticals, while recording net outflows from cultural media, non-ferrous metals, and film and cinema sectors. The electronics sector alone saw net inflows exceeding 4.7 billion yuan.
Market Overview
On the board, on the gaining side, military equipment and aerospace sectors surged to lead the market, with more than ten constituent stocks hitting the daily limit. The low-altitude economy concept performed actively, while Fujian local stocks, real estate, pork farming, and wind power equipment sectors followed suit. On the adjusting side, the PCB concept pulled back after rising, with stocks within the sector diverging; Sihui Fuji dropped more than 10%. Components and gaming sectors were relatively lagging. Overall, the market showed a pattern of rapid rotation of hot spots, with funds withdrawing from previously high-flying stocks such as PCB and optical modules and concentrating into event-driven sectors like military and low-altitude economy. More than 4,800 stocks across the market rose, but structural divergence was evident.
Hot Sectors
1. Military Equipment Sector Surges
The military equipment sector surged significantly. Aero Engine Corporation of China hit its third limit-up in four days. Great Wall Military Industry, Jin'aobo, Chenxi Aviation, Guangdong Hongda, and Aerospace Chenguang hit the daily limit, with more than ten stocks in the sector sealing the limit.
Commentary: On the news front, the press conference for the 16th China International Aviation and Aerospace Exhibition was held in Beijing on October 13. This year's China Airshow will be held in Zhuhai, Guangdong, from December 7 to 13, extended from 6 days to 7 days. The indoor exhibition area of the main venue reaches 135,000 square meters, with over 3,000 pieces of equipment on display. "First-time exhibits" and "premiere" products account for about 10%. More than 170 aircraft have registered for the main venue, and over 1,100 enterprises from nearly 50 countries and regions have signed up to participate. This airshow for the first time adopts a "one show, three zones" layout, with multiple new types of equipment from the Chinese Air Force and Navy appearing on the same stage. Additionally, according to media reports, on October 15, Yemen's Houthi armed forces launched 6 ballistic missiles at the Presidential Palace in Aden, and the ongoing geopolitical situation in the Middle East continues to ferment, which is also listed as one of the sentiment catalysts for the military sector.
2. Low-Altitude Economy Concept Performs Actively
The low-altitude economy concept performed actively. Wanfeng Auto, CITIC Offshore Helicopter, and Baolong Technology hit the daily limit.
Commentary: On the news front, according to Securities Times, the Hong Kong Working Group on Developing the Low-Altitude Economy is fully committed to formulating the "Action Plan for the Development of the Low-Altitude Economy," improving the regulatory framework, standard setting, and infrastructure. Related actions include close cooperation with the mainland to achieve cross-border low-altitude logistics test flights as soon as possible, gradually expanding the low-altitude cross-border logistics network in the Greater Bay Area, and carrying out the construction of a smart low-altitude traffic management system. The draft has been completed and is currently under consultation, with completion expected within the year. On the policy front, the "15th Five-Year Plan" recommendations reviewed and approved by the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China explicitly propose "accelerating the development of strategic emerging industry clusters such as new energy, new materials, aerospace, and low-altitude economy." The newly revised Civil Aviation Law of the People's Republic of China, effective July 1, 2026, for the first time incorporates "the needs of low-altitude economic development" into the basis for airspace division. According to the Civil Aviation Administration's disclosure in May, 19 drone models have completed certification, and more than 70 new aircraft models are under review, with the pace of industrial implementation continuing to accelerate.
3. Fujian Local Stocks Perform Actively
Fujian local stocks performed actively. Xiamen Xinde and Fujian Cement both hit the daily limit, while Strait Innovation, Zhangzhou Development, and Pingtan Development followed the upward trend.
Commentary: On the news front, according to statistics from Fuzhou and Xiamen customs, in the first three quarters of this year, Fujian's foreign trade imports and exports reached 1.52 trillion yuan, a year-on-year increase of 7.4%. Among this, exports were 884.44 billion yuan, up 1.4%; imports were 637.52 billion yuan, up 17%. Fujian's import and export scale and import scale both reached historic highs for the same period.
4. Real Estate Sector Rises During the Session
The real estate sector rose during the session. Shenzhen Property A, Seazen Holdings, and Yuehongyuan A hit the daily limit.
Commentary: On the news front, the Ministry of Housing and Urban-Rural Development, the Ministry of Natural Resources, and the National Financial Regulatory Administration jointly issued the "Notice on Improving the Commodity Housing Sales System" on August 28, 2026, deploying the vigorous and orderly implementation of commodity housing sales of completed units. On October 15, Shenzhen and Hangzhou simultaneously issued implementation opinions. So far, Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Wuhan, and Tianjin—seven cities in total, including all four first-tier cities—have introduced supporting implementation rules, marking the entry of the commodity housing sales system reform into the implementation stage.
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