On December 23, A-shares experienced a dip in the afternoon followed by a late-session rally, with major indices mostly closing higher. Trading volume surged to over 1.9 trillion yuan, yet 3,856 stocks ended in negative territory. The power equipment and semiconductor sectors showed relative strength.
Analysts noted that the late-session rally was not a broad-based uptick but rather reflected a structural trend where capital flowed into high-certainty assets, signaling heightened risk aversion. However, current trading volumes suggest a foundation for a potential "spring rally," with investors advised to focus on thematic opportunities rather than index movements.
The retail and defense sectors underperformed, while semiconductor, Nvidia-related concepts, battery recycling, fluorochemicals, and rare metals led gains. Key stocks such as Baobian Electric, Binhai Energy, and Tianji Holdings hit the daily limit-up. Despite the overall index gains, declining stocks outnumbered advancers, with 3,856 falling and 1,512 rising. Notably, eight stocks saw daily turnover exceeding 10 billion yuan.
GeShang Fund researcher Bi Mengran highlighted the market's divergent performance, attributing the late rally to capital seeking safety amid year-end pressures. She recommended avoiding high-risk small-cap stocks, focusing on high-growth sectors like energy storage and semiconductors, and allocating to stable core assets such as banking and insurance.
Regarding a potential year-end rally, Cheng Liang of 33 Degrees Capital pointed to sustained policy support, clear industrial targets under China's 15th Five-Year Plan, and increasing household savings flowing into equities. Xia Fengguang of Rongzhi Investment cited four factors: market correction, rising capital inflows, policy expectations, and reduced external uncertainties. He emphasized opportunities in the CSI A500 index, particularly in AI, advanced manufacturing, and import substitution sectors.
Yinhua Fund maintained a cautiously optimistic outlook for 2026, favoring growth over value stocks, with potential for large-cap rebounds if recovery expectations strengthen. Foran Fund noted limited downside risks amid policy tailwinds, advising focus on AI, semiconductors, and sectors benefiting from policy easing.
Zheng Lujiao of Bamai Investment observed subdued year-end activity but highlighted ETF inflows as a sign of institutional repositioning. She projected significant opportunities in AI, robotics, and power equipment for 2026, driven by global capital expenditure cycles.
Investors are cautioned that market views remain subjective and should not be construed as investment advice.
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