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After a sharp rebound in the previous session, A-shares staged a surge-and-swing performance on Thursday.
The Shanghai Composite Index opened slightly lower near its 5-day moving average, then oscillated upward, touching its 20-day moving average intraday before losing momentum and closing with a modest gain. The Shenzhen Component Index also opened lower before rebounding quickly, but was similarly capped by its 20-day moving average, with its full-day advance narrowing notably.
At the close, the Shanghai Composite Index stood at 3,689.91 points, up 0.1%; the Shenzhen Component Index closed at 11,471.09 points, up 1.19%; and the ChiNext Index ended at 2,566.8 points, up 0.87%.
Trading volume continued to recover, with combined turnover across the Shanghai, Shenzhen and Beijing markets reaching 2.13 trillion yuan, an increase of more than 80 billion yuan from the previous session.
On the sector front, photovoltaic equipment, cloud services, digital media and energy metals led the gains. Oil, coal, components, shipping and ports sectors bucked the trend and pulled back.
Individual stocks maintained a broadly positive pattern, with nearly 4,900 stocks across the entire A-share market gaining, while only just over 600 declined.
Notably, the morning session's volume-backed rally stood in sharp contrast to the afternoon's shrinking-volume pullback.
Some analysts suggest the reasons behind this can be understood from two dimensions: capital and structure.
On one hand, turnover remaining above 2 trillion yuan for two consecutive trading days indicates that incremental funds are indeed continuing to enter the market, providing underlying support for the rebound. On the other hand, the scale of incremental funds remains relatively limited and is not yet sufficient to drive a broad-based rally across all stocks. Capital is rotating rapidly between sectors, with a pronounced seesaw effect, giving the market a characteristic of "ample upside but insufficient staying power."
In the afternoon, computing hardware weakened while new energy, media and pharmaceuticals sectors became active, indicating that the current market is still dominated by a combination of stock-game dynamics and localized incremental capital, with short-term funds showing little willingness to chase highs.
Although the broader market continues its rebound pattern, increased volatility still warrants caution.
"At the current juncture, the rebound that began on Wednesday needs to be viewed rationally. A rebound is a phase, not a matter of one or two days. With overseas negative factors exhausted, domestic policies transitioning from quantitative to qualitative changes, market sentiment recovering and trading volume continuously being released, multiple factors are resonating, and an overall rebound may already be underway," said Yang Changlong, a senior investment advisor at Jufeng Investment Advisory, in an interview with the Financial Investment News.
"However, against the backdrop of relatively limited incremental funds, the sustainability of the rally that started on Wednesday still needs to be verified. The rebound is unlikely to happen overnight, and fluctuations and reversals are inevitable. Thursday afternoon's surge-and-pullback, along with the high rate of failed limit-ups, precisely indicates that pressure from short-term profit-taking and trapped positions remains, and the market needs to gradually digest overhead pressure through sector rotation," he added.
In terms of opportunities, previously oversold sectors have drawn significant institutional attention.
China Merchants Securities stated that as margin balances continue to decline and leveraged funds accelerate their exit, large net inflows into equity ETFs have formed a counterbalance. Combined with improvements on the capital demand side, the supply-demand balance for market funds has improved marginally, though the overall market remains in a stock-game state.
Currently, margin balances have fallen to levels seen at the end of September 2025, while margin balances in the TMT sector have dropped to levels seen at the end of November 2025, providing some relief from margin outflow pressure.
Additionally, the密集 release of domestic market-stabilizing policies, combined with the "boots landing" of the U.S. midterm elections, has helped repair market risk appetite, and previously oversold sectors may be poised for a rebound window.
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