On December 11, the three major A-share indices showed weak fluctuations. By the close, the Shanghai Composite Index fell 0.7%, the Shenzhen Component Index dropped 1.27%, and the ChiNext Index declined 1.41%, while the BSE 50 Index rose 3.84%. Market analysts attributed the afternoon surge in the BSE 50 Index to adjustments in its constituent stocks, which will take effect on December 15, 2025. The updated list includes companies like Wuxin Tunnel Equipment, Bettery, Airu Software, Shuguang Digital Innovation, Anda Technology, and Jinbo Biotech.
Analysts pointed to three key factors influencing the broader market: 1. Oracle’s after-hours stock plunge of 11.5%, intensifying concerns over an AI bubble. 2. The Fed’s rate cut, while maintaining a projection of only one cut in 2026 based on its "dot plot." 3. Market reactions to the Bank of Japan’s recent rate cut, with a former official predicting four potential hikes by 2027.
Sector-wise, commercial aerospace stocks remained strong, with Zaisheng Technology hitting four consecutive limit-ups and Sichuan Jinding rising sharply. Computing hardware-related stocks also performed well, with Fuxin Technology surging 20% and others like Saiwei Electronics and Xinyisheng reaching record highs. Wind power stocks, including Goldwind, Dongfang Electric, and Ruifeng New Energy, also gained.
Notably, Moore Threads surged intraday, surpassing ¥900 per share and reaching a market cap exceeding ¥400 billion, ranking third in A-shares behind Cambricon and Kweichow Moutai. On the downside, real estate, Hainan Free Trade Port, and Fujian local stocks retreated.
Looking ahead, Shenwan Hongyuan maintains that the Spring market rally will likely be a minor rebound within a broader high-volatility phase. Zhongtai Securities expects continued consolidation due to Fed policy signals and year-end portfolio adjustments, while Zhongyuan Securities sees potential upside driven by policy support and improving liquidity.
Key sector highlights: 1. **Wind Power Stocks Strengthen**: Goldwind, Dongfang Electric, and Ruifeng New Energy led gains, supported by improving cash flows and strong Q4 demand expectations. 2. **Commercial Aerospace Activity**: Zaisheng Technology, Zhongchao Holdings, and Hualing Cable surged, with Blue Arrow Aerospace’s supply chain expansion and new production base fueling optimism.
Institutional Views: - **Shenwan Hongyuan**: The Spring rally may be a minor rebound amid high volatility, with tech stocks transitioning from correction to consolidation. - **Zhongtai Securities**: Markets may consolidate ahead, with potential opportunities in discretionary consumption if fiscal policies expand. - **Zhongyuan Securities**: Macro recovery remains fragile, but policy and liquidity improvements could drive further gains, favoring cyclical and tech sectors.
Short-term opportunities may arise in retail, precious metals, aviation, and auto sectors.
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