On September 30, the three major indices closed mixed, with the Shanghai Composite Index up 0.31% and the ChiNext Index down 0.23%.
In terms of sectors, real estate staged a come-from-behind rally, pharmaceuticals fired on all cylinders, and banking, coal, steel, and liquor sectors strengthened. AI hardware remained sluggish throughout the day, with advanced packaging and copper-clad laminate leading declines. More than 2,700 stocks across the market fell. Combined turnover on the Shanghai and Shenzhen exchanges reached 1.4503 trillion yuan, up 33.1 billion yuan from the previous trading day. Major indices all closed lower for the month, reflecting an overall trend of shrinking volume and consolidation. The ChiNext Index plunged 27.8% in the third quarter, while the STAR 50 Index tumbled 30.7%, both posting their largest single-quarter declines on record.
Today is the last day before the holiday and the final trading day of the third quarter for A-shares. Market turnover remained at its latest low level, the three major indices continued to fluctuate within a narrow range, and advancers and decliners were roughly balanced — none of this was surprising.
The biggest highlight on the board was in the sectors.
The "appetizer" was the tech sector opening high and then pulling back, with the trend still a low-level consolidation — or to put a positive spin on it, "still building a bottom."
The "main course" was the fierce battle triggered in the real estate sector after yesterday's favorable policy was confirmed.
The "dessert" was represented by WuXi AppTec (H-shares) hitting an intraday record high, as a number of "old guard" stocks have recently set new highs, signaling some kind of shift in market sentiment.
In today's review, we focus on the latter two courses.
Vanke A, -10% to 8%
After yesterday's close, news of a "mortgage interest subsidy policy for residents" emerged. The market generally interpreted this as the policy tailwind behind the recent strength in the real estate sector finally materializing, and what followed was a wave of short-term profit-taking.
According to Tonghuashun data, the "real estate" sector opened slightly lower in early trading before quickly plunging, falling nearly 5% at its lowest. As the sentiment bellwether of the sector, China Vanke Co.,Ltd. (ASX: 000002) hit the limit-down price within 2 minutes of the open.
However, the subsequent price action clearly suggested that investors should believe the rally was "not over yet." Against the backdrop of low market-wide volume, both Vanke A and the entire sector saw significant volume expansion today; the result of this intense exchange of chips was that "the sell-off actually revived it."
At 10:12 AM, Vanke A was pried off the limit-down board by bargain-hunting capital and then rallied steadily. At 11:10, it crossed above the zero line; at 13:27, it touched its intraday high of 4.40 yuan, up nearly 8%. On the daily chart, the stock's annual line resistance sits at 4.37 yuan, so even without hitting the limit-up, the bullish attitude of capital toward real estate was unmistakable.
Beyond Vanke A's dramatic swings, Shenzhen Property A and Gemdale Corporation also staged "floor-to-ceiling" moves intraday.
So, what are funds betting on?
We noted that a screenshot circulating online showed Banxia Investment's Li Bei posting on WeChat Moments around midday (after the real estate sector had turned positive overall), saying: "One bullish candle changes sentiment, two bullish candles change attitudes, three bullish candles change beliefs." In the chat records attached to the screenshot, her view was that "speculative bets on policy have left the market" and "the money entering today is all medium-to-long-term money."
Regardless of whether the screenshot is authentic, the remarks attributed to Li Bei do reflect the views of some investors. But we believe that capital absorption after a policy catalyst materializes is itself part of the short-term play; "speculative money" has not left entirely but has found new points of contention.
As some investors discussed online: with interest subsidies in place, there may be a series of follow-up measures introduced.
Regarding the mortgage interest subsidy policy, Shenwan Hongyuan believes that the pre-sale housing sales system is a major reform of the real estate development model; after the new policy, new home supply will shrink significantly, but demand still has strong support, improving the supply-demand relationship. In addition, the September State Council executive meeting explicitly studied the introduction of policies to stabilize real estate, and three ministries including the Ministry of Finance issued a home purchase interest subsidy policy. With supply-side contraction and demand-side policies beginning to take effect, this will comprehensively reinforce the establishment of a price bottom in core cities such as Shanghai.
These "Old Guard" Stocks Recently Hit Record Highs
Before this week's trading began, we conducted a data review on September 26, which noted that tech stocks that experienced a sharp sell-off in July could "barely be counted on one hand" in terms of those that managed to reverse and set new highs in the third quarter.
Now that the third quarter has ended, tech stocks have not seen an overall recovery; the other side of the trend is that "old guard" stocks are improving. (Note: The term "old guard" carries absolutely no derogatory meaning in this article.)
From today's trading, the "old guard" sectors were firing on multiple fronts: at 10:46 AM, WuXi AppTec H-shares hit a record high, driving the pharmaceutical sector higher. Around the same time, WuXi AppTec A-shares were also rallying, and in fact, its A-share record high had already appeared as early as August 20. In the morning, real estate bottomed and rebounded — no need to elaborate; banking and auto整车 sectors rallied around the same time, and even the planting and forestry direction (agriculture) was driven higher. In the afternoon, the liquor sector rose again.
Wind data shows that in the three trading days before the holiday, a total of 12 stocks hit record highs (calculated by intraday high prices). In terms of industry distribution, the ratio of "traditional old guard" to "tech newcomers" was 9:3. Even after excluding two recent IPOs (C Hongfucheng and Luozhou Shares), "old guard" stocks accounted for as much as 90% of the recent record-high trend.
Guojin Securities research report analysis states that global equity markets recently repaired as expected, then fluctuated repeatedly after geopolitical tensions and better-than-expected US economic data jointly drove US Treasury yields to new highs, with US stocks ultimately significantly outperforming non-US markets. The lagging performance of China-related hardware assets in this rebound may not be solely due to chip positioning reasons, but rather a common global characteristic. Behind this is the logic of capital flowing back to the US under a "strong dollar, high interest rate" environment gradually playing out. Based on this, the institution's recommended October golden stocks are clearly dominated by non-tech names.
Datong Securities, meanwhile, said that looking ahead, the market's "no main theme" characteristic may persist. But from a medium-to-long-term perspective, the logic of technology as a core variable in great power competition has not wavered, and the current adjustment may provide a window for medium-to-long-term positioning. In the short term, defensive holdings are recommended, while in the medium-to-long term, investors can buy on dips in core tech directions such as communications and memory chips.
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