On Friday (November 21), global market risk aversion sentiment continued to intensify, with major Asia-Pacific stock indices falling in unison due to overnight volatility in U.S. stocks. A-shares experienced a significant correction, with over 5,000 stocks declining. The Shanghai Composite Index dropped below 3,900 points, closing down 2.45% at 3,834.89, while the Shenzhen Component Index and ChiNext Index fell 3.41% and 4.02%, respectively. Full-market turnover reached 1.98 trillion yuan, showing a notable increase from the previous day.
Technology and growth stocks bore the brunt of the sell-off, with the Hard Tech Broad-Based Dual Innovation Leaders ETF (588330) dropping 4.1% intraday. The ChiNext Artificial Intelligence ETF (159363) opened with a gap down, plunging 4.83% on heavy volume and breaking below all short-term moving averages. Previously active cyclical sectors like non-ferrous metals and chemicals also retreated, with the Non-Ferrous Metals Leaders ETF (159876) and Chemicals ETF (516020) both tumbling. However, intraday premiums on heavy volume indicated active bottom-fishing by funds.
Amid the broad decline, defensive sectors like banking stood out. Bank of China rose 0.8% against the trend, hitting a new all-time high, while the largest banking ETF (512800) briefly turned positive in early trading. Consumer stocks also outperformed, with the Consumer Leaders ETF (516130), Food ETF (515710), and Agriculture, Animal Husbandry & Fishery ETF (159275) all beating the market. Orient Securities noted that the food and beverage sector may be "easier to rise than fall" in 2026.
What triggered this sell-off? Analysts pointed to declining expectations for Fed rate cuts and continued weakness in Japanese government bonds as key external factors. Domestically, the market had largely priced in valuation recovery for risk assets, but as Q4 investment pressures emerge, volatility may increase.
How to respond? Some institutions suggest the short-term market may maintain a "blue-chip support + thematic rotation" pattern, with low-valuation financial stocks like banks offering defensive appeal. Investors should monitor November’s manufacturing PMI and the Fed’s December meeting. Long-term, the "systematic 'slow' bull" trend remains intact, with opportunities in consumption, high-growth sectors, traditional industries, and dividends.
**ETF Spotlight: Key Sector Updates** 1. **Hong Kong AI Shows Resilience**: Xiaomi Group rose nearly 3% intraday, while the Hong Kong Internet ETF (513770) rebounded from losses, closing down just 0.92%. Net inflows totaled 54.14 million yuan over five days, with 4.27 billion yuan absorbed in 60 days. The sector’s valuation advantage (PE of 22.47x, near 10-year lows) and strong Q3 earnings underpin its appeal.
2. **Food & Beverage Outperforms**: Kweichow Moutai’s 1935 product saw sales surge over 20% in key markets, driving sector resilience. The Food ETF (515710) fell 1.29%, but its index’s PE of 21x (10th percentile) highlights long-term value. Analysts expect a "bottoming" earnings recovery by 2026.
3. **AI Hardware Corrects, Apps Rally**: The ChiNext Artificial Intelligence ETF (159363) dropped 4.83% as optical module stocks like InnoLight (down 8%) led declines. However, AI application plays like Yeahka surged 20%. Nvidia’s strong earnings and Alibaba’s AI app launch signal sustained demand for compute and potential catch-up rallies in AI apps.
**Key Takeaways**: - **Optical Modules**: 1.6T module prices have risen to $2,000+, with 800G price declines slowing, signaling "volume-price synergy." - **AI Apps**: Domestic and global catalysts (e.g., Google’s multimodal AI) may fuel a rebound in undervalued AI applications.
For exposure, consider the ChiNext Artificial Intelligence ETF (159363) (54% optical modules, 20%+ AI apps) or the Hong Kong Internet ETF (513770) (Tencent, Alibaba, Xiaomi).
*Risks: Past performance does not predict future results. Investors should assess fund details and risk profiles before investing.*
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