On October 21, the market collectively surged then pulled back, with the ChiNext Index briefly rising nearly 1% before turning negative. By the close, the Shanghai Composite Index fell 0.6%, the Shenzhen Component Index dropped 0.82%, and the ChiNext Index declined 1.62%. On the board, data elements strengthened against the trend, and AI comic drama concepts repeatedly gained momentum. On the declining side, the battery industry chain weakened. More than 3,300 stocks across the market fell. The combined turnover of the Shanghai and Shenzhen markets was 1.43 trillion yuan, a shrinkage of 26.8 billion yuan from the previous trading day. In terms of broad-based ETFs, the E Fund ChiNext ETF (159915) saw notably increased volume near the close, with turnover exceeding 10 billion yuan.
Today, the major stock indices once again surged then pulled back, and the ChiNext Index losing the 2,700-point mark drew attention, but it may not be as "grim" as it appears. The direct reason for the weaker performance is that CATL, the largest weighted stock in the ChiNext Index and the third-largest weighted stock in the CSI 300 Index, fell quite hard. By the close, its decline was 12.03%, the second-largest drop since its listing (second only to 14.72% on October 9, 2024); its turnover reached 32.171 billion yuan (yesterday it was 15.252 billion yuan), ranking first in the entire market. According to Wind statistics, today its contribution to the index decline outweighed hundreds of ChiNext stocks trading in the green. On the board, the sentiment in the solid-state battery sector bore the brunt, which inevitably transmitted to the ChiNext and the entire market. From the news perspective, "third-quarter net profit fell short of expectations" became the trigger for its decline this week. At midday today, reports said that in response to "investors' concerns about next year's industry demand," CATL stated: industry demand in 2027 remains promising and is not as pessimistic as the market expects. This article will not elaborate on this. What we want to remind everyone is that the overall state of the market has actually improved slightly.
First, since Monday, the technology sector's "point-to-area" repair has begun to show results. That day, several highly recognizable previously popular stocks, such as Hengtong Optic-Electric, Demingli, DapuStor, and Unitree Robotics, surged on heavy volume at the bottom; after Tuesday and Wednesday's development, the overall feedback is currently positive. Their stabilization and rebound also drove a recovery in the sector. Taking several on-market ETF products as examples, although intraday surge-then-pullback situations are hard to avoid, this week's trend is as follows: Communication ETF, ChiNext Computing Power ETF, Robot ETF.
Second, so far this week, capital inflows into broad-based ETFs have not stopped, only the pace and scale have changed somewhat compared with before. Near the close today, E Fund ChiNext ETF (159915), Huatai-PineBridge CSI 300 ETF (510300), Harvest CSI 300 ETF (159919), and ICBC Credit Suisse STAR 50 ETF (588050) "as expected" saw slight increases in volume. By the close, their turnovers were 10.41 billion yuan, 5.943 billion yuan, 1.890 billion yuan, and 545 million yuan, respectively. In fact, apart from the ChiNext Index and CSI 300 (which are more affected by CATL), most stock indices, after bottoming and rebounding on Monday, have not made new lows for two consecutive days, and even stood above the 5-day moving average (because the 5-day line also came down). Daily K-line of the CSI 1000 Index. According to a research report by Datong Securities, with third-quarter earnings reports about to be disclosed, most technology companies' report expectations are improving, and ETF funds have recently seen significant net subscriptions. It can be seen that many positive factors are continuously brewing. However, it should still be noted that current market sentiment factors have a relatively large impact. Although long-term funds have taken bottom-supporting actions, short-term fluctuations remain large, and it is still hard to say a reversal is imminent in the short term; one needs to wait for the bottom to form. It stated that during fluctuations, one still needs to strengthen defense with dividends; in the medium to long term, one may still need to look to the technology sector and enter opportunistically after the market stabilizes.
Back to sectors. In addition to the communication equipment, communication services, and semiconductors mentioned earlier (the two major directions of "light" and "chip") gradually stabilizing, today's leading gainers also include: Breeding industry. Data from the National Bureau of Statistics show that by the end of the third quarter of 2026, the domestic breeding sow inventory was 36.02 million head, down 1.78 million head, or 4.7%, from 26Q2, and live pig inventory fell 2.6% year-on-year, turning negative for the first time since 2025. Institutions believe this is mainly due to the peak season for pig prices in the third quarter not being strong, continued deep losses on the breeding side driving intensified market-oriented capacity reduction, combined with policy guidance for leading pig enterprises to increase sow culling. At present, sow destocking has entered deep water. Under continued losses, industry cash flow pressure may drive breeding sow capacity to continue significantly destocking in the next two quarters, and the over-culling intensity may be considerable, which is expected to support the reversal elasticity of the pig cycle next year. Culture and media (AI comic drama). On the news front, Volcano Engine launched a premium AI drama incentive plan, providing incentives for premium AI short dramas produced using Seedance and launched on the Hongguo Short Drama APP. It is reported that qualifying AI dramas (including AI comic dramas and AI simulated human dramas), after ranking in the monthly TOP 50 by the work's Hongguo popularity value and passing review, can receive up to 200,000 yuan in incentives per work. On-device AI. On the news front, according to Counterpoint forecasts, the penetration rate of generative AI phones in the global market will reach 52% by 2027, and on-device AI will shift from a high-end selling point to a standard factory feature. Gartner data show that the share of AIPC shipments will jump from 15.6% in 2024 to about 54.7% in 2026, and AIPC is expected to become the norm by 2029. Memory chips. According to reports, based on third-quarter reports or first-three-quarter earnings forecasts disclosed so far, the semiconductor sector's first-three-quarter performance is widely expected to increase, indicating continued high prosperity, especially memory chip companies showing stunning profitability.
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