From November 17 to 21, the A-share market experienced volatile adjustments, with trading volume remaining above 1.7 trillion yuan. In terms of indices, the Shanghai Composite Index fell 3.9% for the week, closing at 3,834.89 points, while the Shenzhen Component Index dropped 5.13%, and the ChiNext Index declined 6.15%. The Beijing Stock Exchange 50 Index recorded the steepest weekly decline among major A-share indices, falling 9.04%.
All sectors under the Shenwan industry classification saw declines. The worst performers were power equipment, diversified industries, basic chemicals, and retail, with drops of 10.54%, 9.18%, 7.47%, and 7.24%, respectively. Steel, pharmaceuticals, non-ferrous metals, construction, and environmental protection followed, all declining over 6%. The banking sector saw the smallest drop at 0.89%.
In terms of capital flows, A-shares recorded a net outflow of 249.316 billion yuan in main funds this week. All 31 Shenwan industries experienced net outflows. Power equipment, electronics, and pharmaceuticals led the outflows at 50.516 billion yuan, 38.388 billion yuan, and 25.762 billion yuan, respectively. Sectors like computers, non-ferrous metals, machinery, automobiles, and basic chemicals also saw net outflows exceeding 10 billion yuan.
This week’s A-share market showed weak profitability. A survey revealed that only 11% of respondents reported gains, with 8% seeing profits below 10% and 3% above 10%. Meanwhile, 89% of respondents reported losses—40% within 10%, 30% between 10% and 20%, and 19% exceeding 20%.
Investor sentiment remains cautious. Regarding next week’s market outlook, 38% of respondents expect sideways movement below 4,000 points, while 36% predict further declines below 3,800 points. Only 18% anticipate a rebound to 4,000 points or higher, and 8% foresee a temporary surge past 4,000 points before retreating.
On the long-term outlook, 50% of respondents believe the Shanghai Composite Index could reach 4,000 points in the current bull market, while 30% expect 5,000 points and 5% forecast 6,000 points. Risk perception varies, with 49% viewing the market as moderately risky, 31% as high-risk, and 12% as low-risk.
The defense sector saw a significant surge in optimism, rising 9 percentage points to 12%, making it the most favored sector for next week. In contrast, sentiment toward new energy and technology sectors declined by 8 and 2 percentage points, settling at 12% and 34%, respectively.
Amid escalating global geopolitical tensions, analysts highlight strong growth potential for the defense industry. Huafu Securities predicts substantial domestic and international demand growth from 2026 to 2027, driven by policy catalysts like the 15th Five-Year Plan and military trade expansion. Dongwu Securities forecasts structural upgrades in defense, emphasizing rigid demand, high-end development, and improved financial health, with military exports and dual-use technologies like commercial aerospace and nuclear fusion playing key roles.
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