The first trading day after the Mid-Autumn Festival holiday saw A-share adjustments deepen. As of the close on September 28, the Shanghai Composite Index fell 1.67%, the Shenzhen Component Index dropped 3.44%, and the ChiNext Index declined 4.53%.
Market participants scrambled to identify reasons for the pullback: significant declines in overseas markets, rising expectations for a Federal Reserve rate hike in October, and increasing uncertainties in U.S.-Iran negotiations, among others. Amid these various disturbances, some investors grew concerned and even chose to hold cash through the holiday.
However, looking ahead, multiple analysts interviewed stated that the short-term A-share adjustment does not alter its long-term resilience. They believe that as the new positioning of China-U.S. relations further expands in substance, the marginal impact of external disturbances will gradually diminish, and the stability of Chinese assets serves as a strong guarantee for the certainty of the capital market.
Tech Stocks' Fundamentals Remain Intact
From the market performance perspective, the sectors leading today's A-share decline were tech-focused boards such as the STAR Market and ChiNext. "For any industry, its long-term upward or downward trend is ultimately determined by the quality of its fundamentals," an analyst noted. According to the latest data from the National Bureau of Statistics, in the first eight months of this year, profits in the electronics industry grew 1.1 times year-on-year, contributing 62.0% to the profit growth of all industrial enterprises above designated size, serving as an important support for the relatively rapid profit growth of these enterprises.
The analyst further pointed out that driven by strengthening demand, tech companies have entered a fast track of earnings realization. Taking the STAR Market as a representative example, companies on the board achieved total operating revenue of 1.01 trillion yuan and net profit of 144.887 billion yuan in the first half of the year, up 38.6% and 437.6% year-on-year respectively. Net profit exceeded the full-year level of the previous year, further demonstrating the board's role as a core mainstay for developing new quality productive forces.
Long-term earnings growth requires continuous R&D support, and recent developments show that a batch of STAR Market R&D achievements are emerging. It is reported that in the first half of this year, physical companies listed in Shanghai invested a total of over 475 billion yuan in R&D, up about 6.5% year-on-year. STAR Market companies invested 104.4 billion yuan in R&D, up 14.6% year-on-year, with the median R&D intensity reaching 12.6%, remaining at a high level. Capital expenditure in emerging industries remained at a relatively high level, proactively directed toward production line upgrades, capacity expansion, and process equipment procurement. In the first half, cash paid for the purchase and construction of long-term assets reached 406.6 billion yuan, up 4.4% year-on-year.
The Market Is Not Lacking Liquidity
During today's A-share pullback, another topic heavily discussed in the market was trading volume. Wind data shows that A-share turnover has not exceeded 2 trillion yuan for three consecutive trading days. Meanwhile, out of 19 trading days since September, only 4 days saw A-share turnover exceed 2 trillion yuan. Over a longer timeframe, during this round of adjustment since July, A-share turnover has shown a downward trend, decreasing from the previous high of 3 trillion yuan.
However, regarding the recent decline in trading volume, experts interviewed said "the market is not lacking liquidity; what it lacks more is confidence." Market participants noted that in the face of rising expectations for overseas rate hikes, China has consistently adhered to an "independent" fiscal and monetary policy. The People's Bank of China proposed at its third-quarter 2026 meeting that it will continue to implement a moderately accommodative monetary policy, intensify counter-cyclical adjustments, maintain ample liquidity, and safeguard the stable operation of the financial market.
Data also shows that at the end of August, broad money (M2) grew 7.5% year-on-year, and the outstanding balance of social financing grew 7.2% year-on-year. In August, the weighted average interbank lending rate and the weighted average pledged repo rate were 1.38% and 1.4% respectively, both at historical lows. China's substantial foreign exchange reserves also provide a strong safeguard against external disturbances. As of the end of August 2026, foreign exchange reserves reached 3.4383 trillion U.S. dollars, ranking first globally for a long time.
At the same time, the ecosystem of "long-term money for long-term investment" in A-shares continues to solidify. Previously, Li Chao, Vice Chairman of the China Securities Regulatory Commission, stated at a State Council Information Office press conference on the "Starting the 15th Five-Year Plan" series that with the joint efforts of all parties, major breakthroughs have been made in investment-side reforms, and the endogenous forces promoting the stable development of the market have been continuously strengthened. Since the beginning of this year, medium- and long-term funds such as social security, annuities, and insurance have collectively net purchased over 600 billion yuan of A-shares, and their holdings of A-share tradable market value increased by 12.5% compared to the end of 2025.
It is understood that since the beginning of this year, the Shanghai Stock Exchange has promoted the listing of 8 STAR Market broad-based ETFs and 19 STAR Market industry-themed ETFs, covering sub-themes such as STAR chips, STAR chip design, and STAR artificial intelligence, further enriching the "toolbox" for STAR Market investment. As of September 24, 2026, the Shanghai Stock Exchange has listed a total of 150 STAR Market ETFs, with an overall scale of approximately 389.8 billion yuan, continuously and effectively guiding social capital to gather in the field of technological innovation.
Institutions Actively Bullish on the Market
Looking ahead, regarding whether investors should cautiously hold cash through the holiday, many institutions advise investors to be more confident. Xu Jinfeng, Chief Strategy Analyst at Caitong Securities, pointed out that current downside risks have further diminished, and holding stocks through the National Day holiday may be more worthwhile. In the short term, A-share volume bottoming out and rebounding, along with the digestion of overseas denominator-side negative factors, have further reduced downside risks.
Qiu Xiang, Chief A-share Strategy Analyst at CITIC Securities, also stated that in an environment where the industrial prosperity trend has not yet cooled, and only the long-term narrative ceiling has been touched and priced to a certain extent, the probability of the market directly ending after a round of violent adjustment is very low, and a second offensive or even new highs are likely.
It is worth mentioning that at the current stage, foreign institutions are also expressing optimism about the market through practical actions. Wind data shows that as of September 27, 640 foreign institutions have participated in research on A-share listed companies this year, with a total of 5,949 research visits. "The intensive research schedules of foreign institutions reflect international capital's recognition of China's economic resilience, industrial upgrading achievements, and technological innovation capabilities. The certainty, scarcity, and global allocation value of Chinese assets are increasingly apparent, and their long-term appeal is growing," analysts said.
Public fund views are equally positive. China AMC stated that corporate earnings continue to grow at a high rate, fundamentals are solidly supported, and the market has upward momentum. It is currently at a critical window of "earnings verification," and A-share earnings are expected to continue recovering in the fourth quarter. Currently, the CSI All Share Index has a valuation of 20.3 times, at the 69.6th percentile historically, with a price-to-book ratio of 1.75 times, significantly down from the high point in the first half of the year. Non-performance-related concerns have been largely priced in, and the probability of valuation repair is relatively high.
"The resilience, vitality, and stability of China's capital market do not depend on a single industry or individual listed company, but stem from systematic support jointly formed by economic fundamentals, financing patterns, and policy support. External environmental disturbances are generally controllable, and domestic policies maintain independence and resolve. China's monetary policy adheres to being 'self-centered,' the macro-prudential toolbox continues to enrich, and the ability to withstand external shocks has significantly strengthened," analyzed Huatai-PineBridge Fund.
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