Three benchmark indices delivered mixed performances this week, with the Shanghai Composite advancing 1.20%, while the Shenzhen Component Index slipped 1.00% and the ChiNext Index dropped 3.42%. Market participants are now weighing how the trajectory might unfold from here, with several leading brokerages offering their perspectives.
CITIC Securities highlights that rapid structural rotation has become the norm in A-shares since 2022, with such high-speed rotation typically persisting for one to two months. These swift rotations are underpinned by insufficient breadth in earnings upgrades and a scarcity of sustainable investment themes. The current environment features an intensifying phase of trade frictions and amplified exchange-loss effects, placing valuation constraints on the outbound expansion theme—one of the most critical earnings drivers—thereby narrowing the market's upside breadth and fueling sector rotation. Recent advancements in AI have reinforced the existing trend of rapidly growing compute demand, yet they have not reshaped the long-term commercialization narrative. However, if new developments akin to RSI or anti-distillation technologies were to emerge, they could unlock long-term valuation headroom. During rapid rotation phases, "low-valuation" strategies tend to dominate, though only the PB-ROE approach clearly outperforms in such an environment, with gains strengthening as rotation accelerates. Momentum strategies, by contrast, suffer the most. Higher rotation implies opportunities will increasingly manifest as valuation repairs for fundamentally supported names. The firm's medium-term strategy proposes a "AI + Energy/Chemicals" barbell structure, noting that AI has driven concentrated gains in Q2, while energy and chemicals are expected to gradually gain attention.
Shenwan Hongyuan Securities maintains its short-to-medium-term outlook: after the market completes a secondary bottom test, a rebound is likely to persist through late September. The high point of this rally could arrive once expectations for steady and far-reaching policy measures ferment, triggering a concentrated release of optimism across short, medium, and long-term horizons. A higher-level industrial catalyst would be necessary to restart the AI chain rally, which would likely require more time. Consequently, September may not see new highs, and another correction phase could follow. Technology sectors may experience quarterly-level consolidation. The firm reiterates its four-step roadmap for AI chain strength: first, an oversold bounce with restored effectiveness of fundamentals-based research; second, a secondary bottom test giving way to buy-the-dip forces, with the rebound likely extending to late September as policy expectations build and optimism concentrates—potentially marking the rally's peak; third, by the Q3 2026 earnings season, valuations will have adjusted sufficiently for earnings growth to support share prices, allowing for effective differentiation within the overseas compute chain; and fourth, a new high for the AI complex would require a heavyweight industrial catalyst that unifies consensus around AI industry trends.
Zhang Qiyao of Industrial Securities observes that as wealth effects transmit and demand spills over, more domestic-demand industries are revealing earnings improvement signals in the latest interim reports. This transmission path is first emerging in the real estate chain, services consumption, and premium consumption sectors, including property development, retail, beauty & personal care, and education. A new virtuous economic cycle is being validated: technology and high-end manufacturing serve as new growth engines, while real estate and consumption act as lagging beneficiaries of wealth effects. The firm expects the transmission path of "external demand pulling domestic demand, and tech manufacturing pulling real estate consumption" to unfold on a larger scale across broader industries. As more prosperity signals become visible and trusted, the market will continue pricing in broader fundamental recoveries.
China Galaxy Securities identifies three layers of gamesmanship facing the A-share market. First, policy expectations: stability-focused policies are intensifying, with the "Six Networks" progressing from planning to project coordination, investment/financing mechanisms, and construction implementation, alongside strengthened financing support for the property sector. Key focal points include incremental policy space under weak domestic demand, the effectiveness of fiscal fund disbursement, major project commencements, equipment tenders, and real estate sales. Second, earnings validation: as of August 28, 5,393 A-share companies have disclosed interim reports, showing continued improvement overall. Electronics, non-ferrous metals, and non-bank financials lead profit growth, with technology growth and resource-sector prosperity expectations gradually gaining earnings support. Attention shifts to Q3 and full-year earnings expectations, favoring directions with sustained earnings delivery and reasonable valuations. Third, external disturbances: Federal Reserve Chair Warsh's Jackson Hole speech maintained a hawkish tone, leaving high overseas rates constraining premium-growth sectors. However, global AI capital expenditure remains elevated, possibly steering tech markets toward further internal differentiation driven by orders and profitability. US-Iran tensions could still disrupt risk appetite through oil prices and inflation expectations. In summary, domestic policy expectations should support the market's center of gravity, interim results and subsequent earnings delivery will affect the persistence of structural opportunities, while external risks may continue to pressure short-term sentiment and valuations. Next week's events to monitor include US ISM PMI and non-farm payrolls, the G20 Finance Ministers and Central Bank Governors meeting, domestic PMI readings, post-report season earnings expectations, Broadcom's results for further AI chain validation, MSCI's August index review taking effect after August 31 close, and IFA 2026 Berlin plus the OPEC+ monthly production policy meeting.
Zhongtai Securities believes the current correction is nearing its end. The market has entered the latter half of bottom-building, with short-term volatility still possible but downside space clearly limited. The mid-to-late August pullback has essentially realized previous forecasts. Domestically, retail sentiment has returned to investable ranges, with growth ETFs including STAR 50, ChiNext, and CSI 1000 seeing notable long-term capital absorption during both sharp declines. Capital deployment on down days suggests a right-side bottom is forming. Regarding US-Iran dynamics, negotiations are approaching a new equilibrium. Iran has refocused demands on strait control, with reports indicating Omani coordination toward temporary arrangements and increased diplomatic mediation. Given that strait and nuclear issues involve Iran's core interests, US economic pressure has limited room to force further concessions; conversely, oil prices, inflation, Treasury yields, and midterm elections constrain US escalation. Short-term rhetoric and market disturbances may persist, but the situation likely reverts to rolling temporary arrangements. Oil price surges and rate-hike expectations should correspondingly cool, maintaining gold and non-ferrous metals' allocational appeal. The AI cycle has yet to show sufficient evidence of trend deterioration. Open AI's new models and August annualized revenue are approaching validation windows, with high-frequency signals still pointing to revenue improving on July's trajectory. If model iteration and commercialization reaccelerate, both external pressures on the current tech correction would ease concurrently.
Guosen Securities asserts the A-share bull market remains intact, advocating balanced allocation. August saw a rebound, and with current macro-policy conditions and market sentiment, the market is expected to continue its upward oscillation within a secular bull phase. Externally, market pricing has raised the probability of a September rate cut, though Warsh has not committed, leaving uncertainty. Domestically, the July Politburo meeting clarified stronger counter-cyclical adjustments, and since mid-August, Beijing, Shanghai, and other first-tier cities have issued property market policies expected to drive macro and micro fundamentals improvement. Historically, bull-to-bear transitions occur amid overheated sentiment, persistently tightening liquidity, and clearly weakening macro conditions—none of which are currently present. With valuations and sentiment still below historical bull market peaks, supported by positive domestic and international macro factors, the A-share bull market has room to deepen.
Sinolink Securities advises defensive positioning, noting clear signals have disappeared across all paths while future clues emerge. The market may lack obvious drivers and themes in the coming phase; defensive thinking prevails until the next catalyst. Recommendations include, first, energy as the primary commodity pick: coal, oil, tanker shipping, and refining/chemical chains continue benefiting from global energy restocking demand. Non-ferrous metals (copper, gold, aluminum) serve as the dollar's counterpart assets, with current headwinds representing exogenous variables—patience until the September FOMC meeting. Second, under defensive thinking, dividend-style assets offer advantages from absolute-return investors' rotation, with high-dividend, low-volatility, stable-cash-flow assets the core direction for absolute return capital. Third, under tightening expectations, global manufacturing recovery must wait out the headwind period; export chains (construction machinery, grid equipment) retain allocational value.
Hua Jin Securities expects A-shares to trend modestly higher in September, with growth likely outperforming. Policy and external events may turn positive: September policy likely remains supportive, while the external environment may improve marginally—US-Iran talks could reach an agreement, and a potential US-China summit might occur, potentially easing bilateral relations. Economic and earnings fundamentals likely continue recovering: exports may sustain elevated growth, property investment may remain weak while infrastructure investment stabilizes/rebounds, high-tech manufacturing investment sustains high growth, and retail sales growth may stabilize. Liquidity likely remains accommodative across both macro channels and equity fund flows.
Zheshang Securities notes this week's initial downward probe tested market support before oscillating higher, with most indices closing positively. With support levels now identified, the recent two-week pullback phase may conclude, transitioning into range-bound trading with a gradual upward center of gravity to continue the medium-term rebound. Before medium-term rebound targets are reached, short-term pullbacks are manageable and may even present opportunities. Allocation-wise, medium-term positions should be held while awaiting the rebound's progression; short-term positions can participate opportunistically during "step-back" dips but should avoid panic during pullbacks. Among sectors, innovative drugs have rallied significantly recently—buy on dips without chasing. Securities and Hang Seng Tech are completing their pullback phases and merit dip-buying participation; media, computers, non-ferrous metals, and SOEs merit similar approaches. Recent property policy rollouts and El Nino's impact on global agriculture warrant attention to those sectors.
Kaiyuan Securities emphasizes continuing rebalancing strategies with focus on earnings-surprise pricing opportunities. In the near term, crowded trades are still being digested, and volatility may remain elevated. Structure-wise: first, micro-and-small caps remain top recommendations, particularly CSI 2000 and Wind Micro-cap indices; second, sectors with net profit growth exceeding expectations include electronics, defense, computers, oil & gas, non-ferrous metals, and non-bank financials; third, rebalancing opportunities center on non-ferrous metals, basic chemicals, new energy, agriculture, pharmaceuticals, and select mid-stream manufacturing such as shipbuilding; fourth, high-dividend directions like banks, utilities, and power offer attractive risk-reward in volatile markets. Over the medium term, the bull market logic remains intact, though slope expectations should moderate. Technology remains the medium-term mainline, but broad beta is increasingly difficult; next-stage gains will come from re-screening within technology. Allocation continues seeking intersections of "secondary ignition + narrative tension," focusing on AI materials, domestic compute chains, PCB and optical module upstreams in overseas compute chains, programming agents, enterprise-level agents, and new prosperity directions from tech spillovers in power equipment, electricity, energy metals, and liquid cooling.
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