Last week, A-shares continued to fluctuate and weaken, leaving many investors anxious. The Shanghai Composite Index fell 2.56%, while the large-cap-leaning SSE 50 and CSI 300 declined 1.39% and 3.40% respectively. Small-cap styles underperformed, with the CSI 1000 and CSI 2000 dropping 6.62% and 6.40% respectively. Tech-growth-oriented ChiNext and STAR 50 fell 8.90% and 6.77% respectively. The defensive CSI Dividend Index also posted a small loss of 0.37%. In terms of trading, average daily turnover was 1.58 trillion yuan, shrinking by about 229.3 billion yuan compared to the average daily turnover of the two trading days the previous week. At the sector level, all A-share sectors declined this week except food and beverage and banking, with communications, electronic components, and basic chemicals leading the declines. (Data source: Wind, statistical period: 2026.10.12-10.16)
In review, Invesco Great Wall Fund believes that the market adjustment during the week showed obvious structural characteristics. On Monday, A-shares fluctuated and adjusted on lower volume. News of a U.S. Section 337 investigation disturbed the tech hardware sector, while overseas short-drama application data catalyzed strong performance in the media sector. Recently, several listed banks intensively disclosed interim dividend plans, supporting related sectors to buck the trend. On Tuesday, major A-share indices bottomed and rebounded. Several PCB companies collectively disclosed substantial third-quarter earnings forecasts, driving a sharp afternoon rebound in the computing power hardware sector. On October 13, a press conference for the China Airshow was held in Beijing, announcing the airshow dates and participating companies; under this event catalyst, the military sector performed relatively strongly. On Wednesday, A-shares fell on reduced volume. The main drivers from previous trading days largely continued: concerns over overseas AI capital expenditure returns and financing sustainability disturbed the tech hardware sector; Middle East geopolitical tensions and stronger energy prices supported the oil and petrochemical and coal sectors; and short-drama and comic-drama related themes remained active, driving the media sector to rise against the trend. On Thursday, A-shares fell sharply, hitting a new low for the year. The U.S. CPI data released the previous night exceeded expectations, and rising expectations for a Federal Reserve rate hike triggered tighter global liquidity expectations. Continued concerns over the sustainability of global AI capital expenditure, combined with sharp declines in major Asia-Pacific indices, jointly suppressed A-share risk appetite and dragged down market performance. On Friday, A-shares fluctuated with slight volume contraction, and major indices closed mixed. Dividend assets continued their strong performance, and some broad-based ETFs saw notable volume increases.
Looking ahead, Invesco Great Wall Fund believes that further significant downside risk may be relatively controllable, and it is advisable to patiently wait for stabilization and a turning point. After the decline, overall A-share market valuations offer good cost-effectiveness, with the equity risk premium of the CSI 300 earnings yield relative to the 10-year government bond yield exceeding 5%. The medium- to long-term performance of the A-share market is determined by domestic economic fundamentals and industrial development progress. Looking ahead to the fourth quarter, the Politburo meeting and the Central Economic Work Conference will be held, and the cumulative effects of pro-growth policies will help maintain investor confidence. Along with the market adjustment, the enthusiasm of listed companies to implement buybacks has increased. Trading value of some broad-based index ETFs has already expanded, and short-term incremental capital entering the market may help maintain market sentiment. The risk of further significant index declines may be relatively controllable; patiently wait for stabilization signals.
In terms of allocation, one may consider balanced allocation and careful selection of structures. Domestic long-end interest rates are at historically low levels. Against the backdrop of reduced market risk appetite, high-dividend sectors may be an important choice for capital seeking safe-haven allocation. In addition, the AI technology revolution continues to advance, representing a medium-term industrial development trend. Some technology companies still offer bottom-up allocation opportunities, requiring careful selection during the adjustment process. Cyclical sectors represented by consumption and cyclicals have relatively high odds, but the trend remains left-side, requiring analysis in conjunction with the pace of domestic demand recovery. The above views only represent the views at the time and may change in the future. They are for reference only and do not constitute investment advice or guarantees, nor are they any legal documents. MACD golden cross signals have formed, and these stocks are rising well!
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