On January 6, the A-share market set two historic records: the Shanghai Composite Index closed at 4083.67 points, marking a near-decade high for closing prices; simultaneously, its 13 consecutive days of gains shattered a 33-year-old record for the longest winning streak.
Trading volume surged to 2.83 trillion yuan that day, reflecting intense bullish sentiment. Investors quipped, "The 4000-point level has transformed from a toll booth into a gas station."
Institutional analysis indicates the core driving force behind this rally is the continuous inflow of capital from insurance funds, margin financing, and foreign investors.
Buoyed by expectations of "good start" capital inflows, industry insiders believe the spring rally has commenced, with the A-share market in 2026 evolving towards a more balanced, comprehensive bull market.
January 6 saw all three major A-share indices close higher. The Shanghai Composite Index rose 1.50% to 4083.67 points, not only surpassing the high from last November but also reaching its highest level in over a decade; the Shenzhen Component Index gained 1.4%, and the ChiNext Index advanced 0.75%.
The Shanghai Composite Index achieved a 13-day winning streak, setting a new historic record. The previous record was 12 consecutive gains from February 25, 1992, to March 11, 1992, a streak that had remained unbroken for 33 years.
Sector-wise, the brain-computer interface sector surged again with a wave of limit-up gains; companies like Sanbo Brain Hospital and Weisi Medical saw nearly 20 stocks hit their upper limits. The commercial aerospace sector continued its ascent, with China Satellite Communications and Goldwind Technology among eight stocks reaching limit-up, with China Satellite Communications achieving its fourth limit-up in six trading days. The non-ferrous metals sector was active, with stocks like CMOC Group and Zijin Mining Group hitting new all-time highs. The chemical sector strengthened significantly, with stocks like Chlor-Alkali Chemical sealing their limit-up. Major financial sectors including insurance, securities, and internet finance also performed strongly, with New China Life Insurance and China Pacific Insurance both hitting new highs, while Hualin Securities and Huaan Securities reached their daily limit.
During the first two trading days of 2026 (January 5-6), the Wind Brain-Computer Interface Theme Index surged 12.97%, and the Wind Commercial Aerospace Theme Index jumped 9.49%.
Data from Geshang Fund shows that, by sector on January 6, non-ferrous metals, non-bank financials, basic chemicals, and defense military led the gains.
Analyzing this, Geshang Fund researcher Tuo Hejiang noted that resource products are strengthening amid expectations of global supply chain restructuring, while the brokerage and insurance sectors are robust due to expectations of "good start" capital inflows in 2026.
Capital is actively positioning for the 2026 market.
Invesco Great Wall Fund pointed out that market expectations for a spring rally are strong, with capital deploying early for the 2026 market, especially after a major tech company's IPO application was accepted pre-holiday, with an expected fundraising of 29.5 billion yuan. Such large tech IPOs often provide strong thematic catalysts for the tech sector.
Furthermore, the market holds high expectations for capital inflows resulting from financial institutions' "good start" initiatives.
"Insurance institutions have achieved good results with their 'good start,' having a large amount of new premium income available for market allocation at the beginning of the year, forming the core supportive logic for the capital side," analyzed Invesco Great Wall Fund.
Tuo Hejiang analyzed that the main impetus for this rally comes from sustained capital inflows. On one hand, insurance capital is accelerating its entry into the market; by the end of September 2025, insurance funds' allocation to stocks and funds reached 5.59 trillion yuan, an increase of 1.49 trillion yuan from the start of the year. On the other hand, margin financing balances reached 2.54 trillion yuan on January 5, 2026, a record high. Additionally, a stronger Renminbi coupled with global liquidity easing is enhancing foreign investors' willingness to allocate to Chinese assets.
Rongzhi Investment fund manager Xia Fengguang observed that after the New Year holiday, the market rose for two consecutive trading days with significantly amplified volume. From the SSE 50 to the Shanghai Composite Index, major broad-based indices have broken through last year's highs.
"This indicates a high degree of market consensus on a spring rally, with long-term capital, margin trading funds, and funds that exited in the fourth quarter returning to form a combined force," said Xia Fengguang.
Yongying Fund believes that, "Amid the resonance of multiple factors including global liquidity easing, expectations of Fed rate cuts, Renminbi appreciation expectations, and anticipated foreign capital回流, China's core assets remain highly attractive, and the market is expected to maintain an overall upward trend."
"The Shanghai Composite Index hitting a 10-year high and breaking through previous highs again is not solely driven by short-term sentiment. The current market is gradually shifting from the 'valuation-driven' dynamic of 2025 towards 'earnings-driven' in 2026, with the core driver transitioning from loose liquidity to corporate profit growth, showing a trend towards balanced market styles," pointed out Yongying Fund.
Shangyi Fund General Manager Wang Zheng similarly believes, "This rally is not merely a result of short-term euphoria, but rather a gradual alignment of heat with medium-to-long-term trends, coupled with asset appreciation due to the US dollar interest rate cut cycle. This rare 13-day winning streak, breaking the historical record of 11-day streaks set during the 2006 and 2018 rallies, demonstrates investors' expectations and confidence in future market performance."
Yang Delong, Chief Economist of Qianhai Kaiyuan Fund, stated that market styles will become more balanced, and previously lagging high-quality leading stocks are expected to see valuation repair opportunities. Beyond the main thematic tech stocks, sectors including consumer blue-chips, new energy leaders, as well as military industry and non-ferrous metals, are all expected to experience rotational gains.
Chen Xingwen, Chief Strategy Officer at Heiqi Capital, noted that the Shanghai Composite Index refreshing its decade-high on January 6 is a phenomenon绝非 driven by short-term sentiment.
From the perspective of the domestic macroeconomy, China's economy continues to recover, with the PMI remaining above the boom-bust line for multiple consecutive months, industrial added value growing steadily, corporate profits recovering, and the STAR Market seeing net profit growth of 28%. These data points provide solid fundamental support for the stock market.
Amid the optimistic atmosphere, some institutions remain cautious about the current market. A CEO of a private equity firm expressed a different view: "Currently, it is lower interest rates driving short-term financing that is supporting A-share valuations."
Geshang Fund's Tuo Hejiang reminded investors that some sectors are experiencing overheated short-term sentiment with rapidly increasing leverage, warranting caution against volatility risks and advising against chasing highs. Simultaneously, valuations in some sectors are excessively high, creating pressure for earnings delivery; if high-growth expectations are not met, it could lead to valuation corrections.
Zhang Kexing, General Manager of Gray Assets, also believes that although the overall trend for the year should still be volatile upwards, short-term fluctuations around the 4000-point level cannot be ruled out.
"Caution is needed towards sectors that have seen particularly large short-term gains but may lack solid cash flow support," Zhang Kexing specifically mentioned, adding that while further new highs for precious metals like gold and silver are possible, entering positions at these levels carries risks.
Yongying Fund believes the current market is characterized by active trading and accelerated sector rotation. Supported by policy expectations, front-running capital, and improving fundamentals, this round of market activity has the potential for strong sustainability, "but attention must be paid to the sustainability of capital flows and the realization of annual report earnings."
Faced with the market's historic performance, institutions generally recommend balanced allocation strategies.
At the industry level, Invesco Great Wall Fund suggests focusing on four directions: first, high-growth sectors where AI remains the most exciting industrial theme; second, resilient external demand, as出海 remains a relatively certain growth opportunity; third, domestic demand, where potential policy support to counter economic downward pressure makes turnaround opportunities worth watching if policy focus intensifies; fourth, high-dividend stocks, which lagged in gains during 2025 but may offer attractive配置性价比 from an absolute return perspective.
Yongying Fund suggests considering a "barbell strategy": on the offensive end, focus on tech growth sectors, including the entire AI industry chain, semiconductors, low-altitude economy, and other new productive forces; on the defensive end, focus on high-odds pro-cyclical assets like non-ferrous metals, chemicals, and new energy.
Zhang Kexing is also adopting a two-pronged approach, "Our allocation is primarily focused on the artificial intelligence sector, such as tech internet, and sectors related to consumption recovery."
Chen Xingwen is similarly optimistic about technology and consumption.
Rongzhi Investment's Xia Fengguang advises investors: "Avoid short-term speculation and chasing highs. Base your decisions on long-term industry trends and the value of dividend assets, and approach investing from these two angles."
Geshang Fund's Tuo Hejiang believes that in the current market environment, sectors like tech growth, resource products, and high dividends possess investment value.
Tuo Hejiang argues that, on one hand, during the critical phase of China's economic transformation and upgrading, tech growth remains the absolute main theme, with key focus on semiconductors, AI, robotics, innovative drugs, etc. On the other hand, globally, in an environment of a weak US dollar super-cycle coupled with manufacturing recovery, resource products are becoming "hedge + pro-cyclical" dual assets, undergoing systematic value re-rating.
Shangyi Fund's Wang Zheng recommends adhering to the general direction of "more commodities and equities, less bonds,"布局科技成长赛道 like brain-computer interface and AI computing power;同时关注 upstream cyclical industry chains and raw materials like copper and aluminum.
A CEO of a private equity firm suggested prioritizing the allocation to Hong Kong-listed consumer and internet companies with valuations around 10 times P/E.
"Regardless of whether the market is bullish or bearish, high-value companies with sound fundamentals are the preferred choice," the aforementioned private equity CEO stated.
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