A panic triggered by an epic plunge in precious metals led to widespread heavy losses across the Asia-Pacific markets on February 2nd, with the A-share market being no exception. The three major indices collectively fell over 2%, and the Shanghai Composite Index plummeted more than 100 points in a single day, closing down 2.48% at 4015.75 points. The total market turnover was 2.61 trillion yuan, marking a second consecutive day of declining volume.
Cyclical stocks bore the brunt of the sell-off, experiencing another wave of limit-down declines. The Huabao Nonferrous Metals ETF (159876) hit its downside limit in the afternoon session, while the Chemicals ETF (516020) closed down 6.98%. Having accumulated substantial gains since the start of the year, profit-taking intensified the selling pressure in these two sectors. Is the cyclical rally over?
CITIC Securities believes that the full unfolding of the price increase theme, from a resources boom to a broader cyclical upswing, may persist throughout the first quarter. The rationale for maintaining core positions in chemicals (key stocks), nonferrous metals, power equipment, and new energy remains valid. However, caution is advised regarding the precious metals sector (key stocks), where speculative characteristics are becoming increasingly pronounced.
Previously, massive capital flowed into ETFs betting on the "price increase logic." As of January 30th, the Huabao Nonferrous Metals ETF (159876) and the Chemicals ETF (516020) had attracted significant inflows of 1.729 billion yuan and 3.553 billion yuan, respectively, over the past 20 trading days.
Liquor stocks defied the market downturn, standing out as the sole bright spot! The Huabao Food and Beverage ETF (515710), which has high exposure to liquor, surged up to 3% intraday, eventually closing with a premium gain of 0.86%. The heavyweight constituent Kweichow Moutai saw its share price hit a near one-month high during the session. According to channel checks, the supply of Feitian Moutai is tight across many regions in the country, with some distributors already starting to sell their March allocations. China Securities (CSC) expressed optimism that the liquor sector might present a significant bottom-fishing opportunity around the Spring Festival holiday, potentially the best in a decade.
The banking sector, highlighted by its strong dividend attributes, regained favor. The largest bank ETF by AUM (512800) managed to close in positive territory. Risk-averse capital rushed in seeking shelter ahead of the turmoil; as of January 30th, ETF 512800 had accumulated net inflows of 1.09 billion yuan over the past 10 days. Some institutions pointed to the opportunity for an oversold rebound in banks, advising investors to focus on the current allocation window.
Commenting on the current market, Galaxy Securities noted that the nomination of Waller as Fed Chair has significantly impacted external markets. However, liquidity support for A-shares continues, and market activity remains at a relatively high level approaching the Spring Festival holiday. The short-term market is likely to remain structurally volatile with frequent rotations between high and low valuation styles. Attention should be paid to sectors with stronger fundamental support. Based on clues from the 2025 annual report pre-announcements, sectors like non-bank financials (brokers), nonferrous metals, and automobiles have a high proportion of positive forecasts, while the technology and growth sectors show prominent earnings highlights.
[ETF Insights Hot Review] Below is a focused discussion on the trading and fundamental situations of several sectors, including food & beverage, nonferrous metals, and banking.
First, the liquor offensive! "Moutai, Wuliangye, Luzhou Laojiao, Fenjiu, Yanghe" strengthened against the market trend, with the Huabao Food and Beverage ETF (515710) surging 3.28%! Institutions suggest the liquor sector might be at a decade-low bottom.
The food and beverage sector charged upwards against the market today! The Huabao Food and Beverage ETF (515710), which reflects the overall performance of the sector, rose rapidly after opening, with its intraday price increase reaching 3.28% before retreating with the broader market. It closed up 0.86% by the end of the session.
Regarding constituent stocks, liquor names rallied collectively. By the close, Jinhuixian Liquor hit the limit-up, Shuijingfang surged 7.44%, and Jinzigu Liquor rose 5.17%. Liquor leaders such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, Shanxi Xinghuacun Fen Wine, and Yanghe Brewery also all closed higher.
China Securities (CSC) pointed out that the core drivers for the liquor sector's strong performance include better-than-expected sales and wholesale prices for Moutai, recognition of its reforms, as well as expectations driven by relaxed property policies and a potential turnaround in the PPI. Moutai's collection and shipment progress exceeds last year's levels, and industry reforms are advancing. The sector is anticipated to bottom out in 2026, with leading companies potentially gaining market share. The firm is optimistic about a significant bottom-fishing opportunity for the liquor sector around the Spring Festival, possibly the best in a decade.
Notably, the food and beverage sector remains at a low valuation level. Wind data shows that as of the previous trading day (January 30th), the PE ratio of the S&P Food Index, tracked by the Huabao Food and Beverage ETF (515710), was 19.81 times, residing at the 3.33rd percentile over the past decade, highlighting the attractive cost-performance for medium to long-term allocation.
Looking ahead, Xiangcai Securities stated that the current valuation percentile for the food and beverage industry is at a historical low. Although market data such as retail sales, consumer confidence, and liquor wholesale prices remain lukewarm, after a prolonged adjustment, sector valuations have relatively fully priced in pessimistic expectations, and inflation shows signs of a mild recovery. As market styles rotate, investment opportunities in the consumer sector are gradually emerging. They recommend focusing on the potential for a bottom recovery and valuation repair after the release of fundamental pressures.
For a one-click allocation to core assets in the food and beverage sector, focus on the Huabao Food and Beverage ETF (515710). According to China Securities Index Co., Ltd., the Huabao Food and Beverage ETF (515710) tracks the CSI Sub-Index for the Food & Beverage Industry Theme. Approximately 60% of its portfolio is allocated to leading high-end and sub-high-end liquor stocks, while nearly 40% covers leading stocks in sub-sectors such as beverages/dairy, condiments, and beer. Its top ten holdings include "Moutai, Wuliangye, Luzhou Laojiao, Fenjiu, Yanghe," Inner Mongolia Yili Industrial Group, and Foshan Haitian Flavouring & Food Co., Ltd. Off-exchange investors can also access core assets in the food and beverage sector through the Huabao Food and Beverage ETF Link Fund (Class A: 012548 / Class C: 012549).
Second, the Nonferrous Metals ETF and 20 Constituent Stocks Hit Limit-Down! Daily K-Line Forms an "Inverted T-Shaped Doji"! Divergence Between Bulls and Bears Intensifies – What's the Outlook?
With all three major A-share indices falling over 2%, the popular Huabao Nonferrous Metals ETF (159876), which had repeatedly hit record highs, corrected along with the market. Its intraday decline narrowed to 4.94% at one point, but it ultimately hit the daily downside limit by the close. The daily K-line formed a gravestone doji (inverted T-shaped doji), indicating intensified divergence between bullish and bearish forces.
Among the constituents, only Zhejiang Huafeng Aluminium managed to close higher against the trend, while the other 59 stocks fell. Twenty stocks, including Aluminum Corporation of China Limited, Shandong Gold Mining Co., Ltd., and Tongling Nonferrous Metals Group Co., Ltd., hit the daily limit-down.
Why did the nonferrous metals sector plunge so sharply? ① An unexpected external variable emerged: the US leveraged loan index fell back to its lowest level since April 2025. TF Securities emphasized that a US dollar liquidity shock may be imminent*. This pushed the US Dollar Index higher in the short term, putting pressure on dollar-denominated nonferrous metals. ② The decline was also influenced by factors such as profit-taking and long position unwinding by short-term futures traders.
Looking forward, New Times Futures believes medium to long-term support for gold prices remains intact. They point out that Waller's nomination and the resulting exchange rate volatility are short-term disturbances. The market's medium-term focus will likely remain on escalating geopolitical risks and the high uncertainty surrounding the Trump administration's policies. In the long run, the deterioration of global debt sustainability and the deepening de-dollarization trend are core variables supporting a structural bull run for gold. Currently, these medium to long-term drivers have not fundamentally reversed*.
Although the overall market outlook for nonferrous metals remains positive, China Chengxin International Credit Rating cautioned that short-term risks related to speculative capital taking profits need vigilance, as volatility may increase. Huatai Securities recommends a medium allocation* to the nonferrous metals sector, meaning a 10%-20% weighting within one's fund portfolio, to both participate in potential gains and diversify risks.
Third, Banking Sector Sentiment Rebounds Rapidly; Top Bank ETF (512800) Holds Firm to Close Higher, Attracting Nearly 11 Billion Yuan in 10 Days! Institutions: Focus on Oversold Rebound Opportunities.
The market experienced volatile adjustments throughout the day, but the banking sector bucked the trend and moved higher. The bank ETF with the largest AUM (512800) saw its price rise up to 1.4% intraday, stubbornly closing up 0.13%. Its full-day turnover reached 1.344 billion yuan, an increase of over 300 million yuan compared to the previous session. China CITIC Bank rose over 2%, while Bank of Shanghai, Huaxia Bank, and China Zheshang Bank gained over 1%.
Capital swiftly flowed into the sector for避险. Today, main force funds recorded a net inflow of 1.55 billion yuan into the banking sector, ranking it 3rd among all Shenwan primary industries. Regarding ETF flows, data from the Shanghai Stock Exchange showed that the bank ETF (512800) saw net inflows on 9 out of the past 10 days, totaling 1.09 billion yuan, indicating a rapid recovery in sector sentiment.
In news from January 30th, the China Securities Regulatory Commission (CSRC) released the latest "Decision on Revising the 'Securities and Futures Law Applicability Opinion No. 18' (Draft for Comments)." Aligning with the core principles of the "Guiding Opinions on Promoting Medium- and Long-Term Capital Entry into the Market," and implementing the "Implementation Plan for Promoting Medium- and Long-Term Capital Entry into the Market," the draft proposes "allowing public offering funds, commercial insurance capital, basic pension funds, enterprise (occupational) annuity funds, bank wealth management products, etc., to participate as strategic investors in listed companies' private placements."
For listed banks, this revision, on one hand, broadens potential sources of equity capital replenishment, and on the other hand, enriches the ways wealth management funds can participate in equity investments. This is beneficial for bank wealth management's transition towards diversified assets and is generally positive for the long-term performance of banks.
Galaxy Securities pointed out that in an environment of low interest rates and accelerated entry of medium- to long-term capital, the banking sector's high-dividend, low-valuation characteristics remain attractive to long-term funds like insurance capital. As short-term capital disturbances are quickly cleared, the pricing dominance by medium- to long-term funds like insurance capital is expected to stabilize the valuation anchor for the banking sector and potentially push it higher, bringing about oversold rebound opportunities and opening a configuration window*.
The Bank ETF (512800) and its Link Fund (Class A: 240019; Class C: 006697) passively track the CSI Bank Index. The index's constituents include 42 A-share listed banks, making it an efficient tool for tracking the overall performance of the banking sector. The Bank ETF (512800) has a latest AUM exceeding 12.1 billion yuan, with an average daily turnover of over 800 million yuan since the start of 2025, making it the largest and most liquid among the 10 banking sector ETFs in the A-share market.
Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Stock Exchanges, etc. Institutional views sourced from: CITIC Securities report dated 20260201 "From Virtual to Real, Pay Attention to the Diffusion of Price Increase Clues." Galaxy Securities report dated 20260202 "Galaxy Strategy: Pre-holiday Sector Rotation Upwards May Be the Main Theme." Xiangcai Securities research report dated February 1, 2026, "Leverage Spring Festival Peak Season Catalysis, Seize Style Rotation Opportunities." China Securities (CSC) Food & Beverage Industry Research Report dated February 1, "Reiterating the Liquor Sector's Decade-Low Bottom Investment Opportunity." TF Securities Financial Engineering Research Report dated January 31, 2026, "February Allocation Strategy: US Dollar Liquidity Shock May Be Imminent." New Times Futures report dated February 2, 2026, "Precious Metals Market Daily Observation." Huatai Securities report dated January 8, 2026, "Mid-Scenario & Tactical Allocation Monthly Report – What Are the Drivers for the Initial Inflection Point in Sentiment?" Galaxy Securities report dated 20250129 "Banking Sector Configuration Window Opens – Analyzing Bank Pricing Logic from Fund Flows."
Note: ETF funds do not charge sales service fees. When subscribing for or redeeming fund units, subscription/redemption agent brokerages may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. Please refer to the legal documents of each fund for specific fee rates.
Risk提示: The Huabao Food and Beverage ETF passively tracks the CSI Sub-Index for the Food & Beverage Industry Theme. The base date for this index is December 31, 2004, and it was published on April 11, 2012. The Bank ETF passively tracks the CSI Bank Index. The base date for this index is December 31, 2004, and it was published on July 15, 2013. The Nonferrous Metals Leader ETF and its Link Fund passively track the CSI Nonferrous Metals Index. The base date for this index is December 31, 2013, and it was published on July 13, 2015. Its performance benchmark is the return rate of the CSI Nonferrous Metals Index. Its annual net value growth rates and the growth rates of its performance benchmark for 2022-2024 were: -19.02%, -9.51%, 3.97% and -19.22%, -10.43%, 2.96%, respectively. Individual stocks mentioned herein are only listed as objective examples of index constituents and do not constitute recommendations for any specific stock, nor do they represent the investment direction of the fund manager or the fund. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for any independent investment decisions they make. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any form to the reader, and the company shall not be liable for any direct or indirect losses arising from the use of the content herein. Investors should carefully read the "Fund Contract," "Prospectus," "Fund Product Key Facts Statement," and other fund legal documents to understand the risk-return characteristics of the fund and choose products that match their own risk tolerance. The past performance of a fund is not indicative of its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Based on the assessment by the fund manager, the risk rating of the funds mentioned in the article is R3-Medium Risk, suitable for Balanced (C3) and above investors. The suitability matching opinion is subject to the sales institution. Sales institutions (including the fund manager's direct sales agencies and other sales institutions) conduct risk assessments of the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions may not necessarily be consistent, and the fund product risk rating results issued by fund sales institutions shall not be lower than the risk rating results made by the fund manager. The descriptions of fund risk-return characteristics in the fund contract and the fund risk ratings may differ due to different consideration factors. Investors should understand the risk-return situation of the fund and make prudent choices of fund products based on their own investment objectives, term, experience, and risk tolerance, and bear the risks themselves. The CSRC's registration of the above funds does not indicate its substantive judgment or guarantee of the investment value, market prospects, or returns of the above funds. Fund investment involves risks.
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