The three major A-share indices suffered another heavy blow on October 30, 2026, with the Shanghai Composite Index dropping more than 1% to lose the 3,600-point mark, the ChiNext Index plunging over 4%, and more than 4,600 individual stocks closing in the red across the entire market.
The CSI 300 Index has now fallen for 12 consecutive weeks, while the ChiNext Index recorded its largest single-month decline in more than a decade.
Yang Chao, a fund manager at Jinxin Fund, told reporters that after deep adjustments in the technology sector, some quality companies' stocks have once again entered a phase suitable for positioning. He believes that, on one hand, industry trends in areas such as AI computing power and semiconductor domestic substitution have not changed due to a single-day correction, with order and earnings verification still progressing, and the fundamental support from domestic liquidity easing and strengthened domestic demand policies remains intact. On the other hand, the rotation between high and low positions indicates that capital has not left the market but is repositioning along earnings certainty, with the market completing style rebalancing through intense turnover. From historical experience, after crowded trades are fully cleared out, industry mainlines often become more valuable for allocation.
ChiNext Index Posts Largest Single-Month Drop in Over a Decade
On October 30, influenced by factors including a sharp selloff in U.S. technology stocks overnight, the three major A-share indices opened significantly lower. Although they briefly rebounded into positive territory around midday, they failed to reverse the downtrend and dived again in the afternoon, ultimately closing at their lowest levels of the day.
As of the close, the Shanghai Composite Index fell 1.44% to 3,599.02 points; the Shenzhen Component Index dropped 2.73% to 10,833.78 points; and the ChiNext Index plunged 4.13% to 2,413.63 points. In addition, the Beijing Stock Exchange 50 Index fell 2.67%, the STAR Market Composite Index dropped 4.66%, and the CSI 300 Index declined 1.39%. The Shanghai Composite Index closed below 3,600 points for the first time since early August 2025, while the CSI 300 Index has now declined for 12 consecutive weeks. The ChiNext Index tumbled 23.02% over the entire month of October, marking its largest single-month decline since February 2016.
Total A-share turnover for the day was approximately 1.69 trillion yuan, an increase of about 117 billion yuan from the previous day, marking the 22nd consecutive trading day with turnover below 2 trillion yuan. On the board, most of the 31 Shenwan first-level industry sectors declined. Food and beverage, transportation, and petroleum and petrochemical sectors led gains, rising 2.84%, 0.91%, and 0.91% respectively. Telecommunications, media, and electronics sectors led declines, falling 6.48%, 5.39%, and 5.11% respectively. Across the entire market, 4,602 stocks declined, with 86 hitting the daily limit down, while only 892 stocks advanced, with 49 hitting the daily limit up.
Notably, liquor stocks surged against the trend, with Huangtai Liquor, Luzhou Laojiao, Gujing Gongjiu, Yingjia Gongjiu and others hitting the daily limit up. Kweichow Moutai shares jumped more than 2.8% to close at 1,392.05 yuan per share, with a latest market capitalization of 1.74 trillion yuan. As recent sharp pullbacks in technology stocks pushed high-priced shares such as Yuanjie Technology and Lianxun Instruments below 1,000 yuan, Kweichow Moutai once again became the only thousand-yuan stock in the entire market.
Guo Yiming, investment advisory director at Jufeng Investment Advisory, told reporters that today's A-share market volatility was mainly driven by three factors. First, U.S. technology stocks weakened overnight, with Google plunging on concerns over returns on AI capital expenditure, while Amazon and Intel's after-hours earnings also triggered market worries, weighing on the Philadelphia Semiconductor Index. This created sentiment spillover to A-share sectors such as optical modules, CPO, computing hardware, and semiconductors, with related sectors broadly opening lower in the morning session. Second, third-quarter earnings disclosure has entered its final stage, and capital is placing greater emphasis on sequential earnings improvement and order sustainability. Among companies that have disclosed third-quarter results, some leaders in storage, copper-clad laminates, PCB, resource products, and high-end manufacturing posted impressive results, but some high-flying technology stocks came under pressure due to earnings falling short of expectations or profit-taking. Third, Friday combined with month-end increased some capital's risk-aversion and repositioning intentions, with defensive sectors such as banking, consumer, pharmaceuticals, and dividend plays showing stronger absorption capacity.
Institutions Say Mid-Term Allocation Value of A-Shares Is Rising
Since July, the A-share market has fallen sharply from highs, with the ChiNext Index and STAR Market Composite Index, both dominated by technology stocks, each accumulating declines of over 40%. Has this round of adjustment ended? How will the market play out going forward?
A representative from well-known private equity firm Starlight Investment told reporters that in the short term, this round of decline has been primarily driven by valuation compression, with no significant changes in corporate earnings. The market remains in an overall bottoming and structural rebalancing process, with sentiment and chip structure having a greater impact on single-day performance. During this period, divergence between sectors and individual stocks is expected to intensify, with themes rotating rapidly. In the medium term, after valuation compression, major index valuations are within a reasonable range, with the Wind All-A P/E ratio at 19.5 times, representing the 62nd percentile over the past 10 years. The Wind All-A ERP index has rebounded to around 3.5%, at the 84th percentile over the past 10 years. Moreover, listed companies are still in an earnings growth cycle, and AI technology stock earnings realization is expected to digest valuations, while non-AI assets are expected to benefit from capital rebalancing and policy support, leading to valuation repairs. Opportunities within the stock market still merit attention.
Guo Yiming believes that the short-term market will remain in a phase of bottoming, and a rebound still requires sentiment repair and sustained money-making effects. The continued net inflows into broad-based ETFs, continued policy tool efforts, and ongoing corporate earnings recovery all provide support for a phased stabilization. However, in the short term, it is still necessary to observe whether trading volume can effectively expand, whether chip clearing in the technology sector is complete, and whether third-quarter earnings can regain capital recognition. "Before the bottom is confirmed, the index may still see fluctuations due to sentiment inertia, but mid-term allocation value is gradually increasing," Guo Yiming said.
Yang Chao stated that looking ahead, although the short-term market may still need time to digest disturbances from overseas and domestic earnings seasons as well as microstructural pressures, the time has come to position in quality technology companies that have been unfairly sold off. Key focus areas include stabilization signals from overseas technology stocks, the pace of domestic demand expansion policy implementation, and third-quarter earnings verification. In terms of operations, it is especially important to avoid repeatedly chasing rallies and selling on declines driven by emotion, and instead use adjustments to achieve balanced allocation.
He believes that in the current volatile market environment, the barbell strategy deserves particular attention. The so-called barbell strategy involves concentrating funds at both ends of the risk spectrum: one end being high-dividend, low-valuation dividend assets for defense, and the other end being technology growth for offense. Using dividend assets as a ballast to control portfolio volatility, while retaining offensive flexibility on the technology side to avoid completely missing out on a technology rebound.
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