All three major A-share indices rose collectively today. By the close, the Shanghai Composite Index gained 0.1%, the Shenzhen Component Index climbed 1.19%, the ChiNext Index advanced 0.87%, the Beijing 50 Index rose 1.79%, and the STAR 50 Index added 1.68%. Total market turnover reached 2.1351 trillion yuan, up 83.2 billion yuan from the previous day, with over 4,800 individual stocks rising across the market.
In terms of sectors, photovoltaic equipment, precious metals, film and cinema, AI corpus, and cultural media led the gains, while oil and gas extraction and processing, oil and gas extraction services, port shipping, banking, and components sectors lagged behind. On the trading floor, the photovoltaic equipment sector showed strong momentum, with more than ten stocks including Bettery, Shichuang Energy, Junda Shares, Saiwu Technology, and Oujing Technology hitting the daily limit, while King Kong Photovoltaic, Maiwei Shares, and Laplace surged over 10%. The precious metals sector was active, with Sichuan Gold, Chifeng Gold, Xingye Yinxi, and Xiaocheng Technology among the top gainers. The film and cinema sector was active in the afternoon, with Ciwen Media and Bona Film Group touching the daily limit, while Huace Film & TV, China Film, and China Television Media led the gains. The coal mining and processing sector fluctuated downward, with Guanghui Energy, China Coal Energy, China Shenhua, and Jinkong Coal Industry among the biggest decliners. The oil and gas extraction and services sector also trended lower, with CNOOC, Zhongman Petroleum, and China Oilfield Services among the top losers.
Following yesterday's "Great Miracle Day," A-shares continued this momentum today, showing strong overall performance throughout the session, with trading volume expanding once again, indicating that off-market funds have gradually begun buying. Although there was a brief plunge in the afternoon, the buying support was exceptionally strong, and the market ultimately closed higher again, with excellent profit-making effects. Upon closer analysis, this is not difficult to understand. The trigger for the afternoon plunge was not hidden: the Philadelphia Semiconductor Index fell sharply overnight, and South Korean stocks, primarily memory chip-related, triggered a circuit breaker during intraday trading today, directly suppressing A-share tech hardware sectors such as optical communications, PCB, and CPO. Core names like Zhongji Innolight and Eoptolink saw their declines significantly widen in the afternoon. More critically, the internal factor was the urge to cash in on yesterday's bottom-fishing gains: yesterday the STAR Composite Index surged nearly 10%, generating extremely generous single-day paper profits, making concentrated profit-taking the following afternoon almost inevitable. At the same time, previously crowded defensive dividend sectors such as oil, coal, and banking were also weakening in tandem, with PetroChina falling over 8%, creating a situation where both technology and dividend sectors faced pressure simultaneously. The essence of the plunge was the simultaneous loosening of short-term profit-taking positions and defensive funds, rather than a systemic selloff driven by a single negative factor.
It is worth noting that the market's ability to recover by the close indicates that funds have not left the market but are engaged in drastic rotation between highs and lows: withdrawing from crowded tech hardware and defensive dividend plays and flowing into photovoltaic, robotics, AI applications, and precious metals, with hot spots rotating rapidly but always having a direction to carry the baton. Notably, as A-shares continue to rebound, top international investment bank JPMorgan has provided its latest assessment. Its core view is that Chinese equities are entering a new allocation window, with the rebound driven by a triple logic of "uncertainty dissipation, valuation and positioning reset, and policy backstop," rather than a single sentiment recovery.
First, after the U.S. midterm elections concluded, policy uncertainty has dissipated. JPMorgan believes that election results, constrained by legislative limits and veto power, will not fundamentally change the overall U.S. policy landscape, and the market had already partially priced this in. More critically, global AI trades are showing signs of loosening: Texas has signaled stricter restrictions on new data center construction, which could trigger short covering and capital rotation. Meanwhile, China's AI localization development has an independent trajectory and is relatively less dependent on U.S. AI capital expenditure, meaning Chinese assets can provide diversified allocation value relative to global AI trades.
Second, valuations and positioning have been substantially reset. Even after the rebound, the MSCI China and CSI 300 have only recovered 8% to 10% from their "924" lows and remain at low levels. JPMorgan expects another 10% to 15% upside and maintains a preference for A-shares over Hong Kong stocks, favoring domestic tech stocks and brokerages. In terms of positioning, margin balances, northbound capital IT exposure, and mutual fund IT holdings have all declined significantly, meaning off-market sidelined funds have the potential to enter the market and drive a阶段性 rebound in the tech sector.
Third, the policy bottom is gradually being solidified, with the "national team" being the key variable. The national team is accelerating ETF purchases, and regulators are releasing backstop signals. JPMorgan characterizes this as "not a bazooka, but a more solid floor," believing that downside is limited. Additionally, JPMorgan's roadshow feedback shows that offshore investors have a stronger willingness to increase allocations, with focus expanding from AI to diversified sectors such as banking, healthcare, and consumer goods. Overall, JPMorgan believes that Chinese assets have a foundation for a阶段性 rebound supported by dissipating uncertainty, position clearing, and policy backstops, but it leans more toward structural allocation opportunities rather than a full trend reversal.
In summary, we also believe that the current A-share market should no longer be viewed too bearishly, and investors can afford to be somewhat more optimistic. The key observation point going forward is mainly whether trading volume can remain above the 2 trillion yuan level. If so, the sustainability of the market rebound will be assured; if trading volume shrinks again, it would indicate that the market may still need to consolidate through fluctuations. As for allocation direction, it is recommended to reasonably position around sectors such as AI applications, embodied intelligence, consumer goods, pharmaceuticals, and large financials.
[Note: Markets carry risks, and investment requires caution.]
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