On January 14th, the Shanghai Composite Index opened strongly, surging over 1% at one point to approach the 4,200-point mark before retreating and turning negative in the afternoon session. The Shenzhen Component Index and the ChiNext Index also saw their gains narrow significantly, while the total turnover for the A-share market neared the 4 trillion yuan threshold, setting a new historical record. By the market close, the Shanghai Composite Index was down 0.31% to 4,126.09 points, the Shenzhen Component Index had gained 0.56%, the ChiNext Index rose 0.82%, and the STAR 50 Index climbed 2.13%, with combined turnover across the Shanghai, Shenzhen, and Beijing exchanges reaching approximately 3.99 trillion yuan.
Sector performance was mixed; insurance, banking, real estate, liquor, and securities sectors trended lower, while media, semiconductors, and oil sectors advanced. Concepts related to AI applications, cloud computing, and computing power remained particularly active.
According to Dongguan Securities, the stock market has demonstrated robust momentum since the beginning of the year, with the Shanghai Composite Index successively breaking through the 4,000 and 4,100 points barriers on heavy volume, forming an upward breakout pattern. Market activity is fervent; however, following the rapid short-term gains and a significant expansion in trading volume, investors should remain vigilant about potential adjustments. Nevertheless, a phase of consolidation could be beneficial, allowing for continuous improvements in fundamentals to digest index valuations, attract sustained inflows of incremental capital, and ultimately propel the A-share market to continue its volatile upward trajectory.
For allocation strategies, sectors such as petroleum and petrochemicals, building decoration, non-ferrous metals, TMT (Technology, Media, and Telecommunications), and coal may warrant attention.
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