The final trading day before the National Day holiday ended on a steady note, with the three major indices closing mixed. The Shanghai Composite gained 0.31% to close at 3,842.19 points, the Shenzhen Component slipped 0.11%, the ChiNext Index fell 0.23%, the STAR 50 dropped 2.51%, and the Beijing 50 rose 0.70%. Combined turnover across the Shanghai and Shenzhen markets reached approximately 1.45 trillion yuan, a slight increase from the prior session, though volume remained subdued amid pre-holiday caution.
At the sector level, pharmaceuticals and biologics led gains throughout the day, with food and beverage, banking, and steel 鈥?consumer and value-oriented segments 鈥?also posting solid advances. Meanwhile, technology and growth sectors that had been strong earlier, including electronics, computers, machinery equipment, and telecommunications, pulled back collectively. The session displayed a clear "pre-holiday defensive posture and high-to-low rotation" pattern: capital migrated from elevated technology names toward lower-positioned pharmaceuticals, consumer, and dividend-oriented plays.
On one hand, the monetary and fiscal policy package announced after yesterday's close 鈥?including mortgage interest subsidies, a 25 basis point cut to the PSL rate, and increased relending quotas for technological innovation and agricultural support 鈥?sent a clear pro-growth signal, boosting market confidence in the fourth-quarter policy environment and relatively benefiting domestic consumption sectors. On the other hand, elevated U.S. Treasury yields continued to weigh on growth valuations, and with the long holiday approaching, the technology sector extended its correction. Data source: Wind.
Today, the pharmaceutical and biologics sector led the market, emerging as the brightest offensive direction ahead of the holiday. The innovative drug industry trend continues to materialize, with business development (BD) licensing deals and major clinical data catalysts arriving steadily. Hong Kong-listed innovative drug assets have recently attracted sustained capital concentration, and under A/H resonance, sector enthusiasm has transmitted to A-shares. Additionally, policy support for innovative drugs is relatively clear, the payment environment is improving at the margin, and combined with the pro-growth signals from today's monetary-fiscal package, market expectations for both domestic pharmaceutical demand and innovation are rising. Interested investors may wish to watch the Vaccine ETF (159643), Innovative Drug ETF (517110), STAR Innovative Drug ETF (589720), and Hang Seng Biotech ETF (520930) to capture the window for positioning in the innovative drug industry trend.
Today, banking (SW Level 1 industry index) rose 1.47%, and the SSE State-Owned Enterprise Dividend Index gained 1.20%. The strength in dividend-value sectors formed an obvious seesaw effect against the pullback in technology. Looking back at the third quarter, dividend assets performed relatively well overall. Among SW Level 1 industries, banking and coal ranked at the top of the sector gains, with high-dividend and resource plays continuing to attract capital favor. The signals of real estate and fiscal support in yesterday's post-close policy package further improved market expectations for bank asset quality and pro-cyclical operations. With the long holiday approaching, capital also showed a tendency to concentrate in high-dividend, low-volatility assets to "hedge and hold through the holiday." Over the medium term, in a low interest rate environment, the dividend yield attractiveness of dividend assets remains prominent, and the underlying logic of supply constraints and high payouts is unchanged 鈥?they may remain an important ballast in investment portfolios. Conservative investors may wish to consider the Dividend SOE ETF (510720), Cash Flow ETF (159399), and Coal ETF (515220), or may consider a barbell allocation approach combining value and growth.
Looking back at September and the third quarter from the quarter-end vantage point: at the index level, the Shanghai Composite corrected 3.61% in September, the CSI 300 fell 5.78%, the CSI A500 declined 6.28%, the ChiNext Index dropped 8.82%, and the STAR 50 slid 9.17%. Relatively speaking, the CSI 2000 (-2.29%) and Beijing 50 (-2.41%) posted smaller declines, highlighting the resilience of micro- and small-cap stocks. Extending to the third quarter, market tiers were fairly distinct 鈥?sectors with stronger growth attributes and higher elasticity experienced relatively larger corrections during the quarter.
Differentiation at the industry level was even more extreme. Among the 31 SW Level 1 industries in September, four posted gains: real estate (+6.28%), pharmaceuticals and biologics (+2.47%), banking (+2.32%), and beauty and personal care (+0.80%). Data source: Wind. For the third quarter: coal led with a gain of +19.29%, followed by petroleum and petrochemicals (+15.32%), agriculture, forestry, animal husbandry and fishery (+15.10%), banking (+14.56%), and pharmaceuticals and biologics (+10.12%). Meanwhile, electronics, telecommunications, building materials, and power equipment sectors corrected. The leading group was dominated by "high-dividend, resource, and low-position recovery" sectors, while the sectors that pulled back most were largely the high-prosperity growth tracks from the first half. Overall, this represented a fairly evident market style rebalancing.
Data source: Wind. Looking ahead: in the short term, market volume continued to shrink before the holiday. After volume contracts to an extreme, indices often tend to rise more easily than fall, and whether a reversal can be triggered after the holiday is worth anticipating. Based on historical calendar effects, A-shares tend to welcome a "red open" after holidays, with small-cap growth sectors offering better elasticity, though overseas market disruptions during the holiday still warrant caution. In our view, the prosperity of the technology industry has not been undermined 鈥?this round of correction is more a matter of capital trading behavior rather than a reversal in fundamentals. The memory price increase cycle continues, South Korea's semiconductor exports remain in growth, and the industry trend is intact. In the fourth quarter, the market's main focus is expected to refocus on segments where the supply-demand gap has not converged and earnings continue to improve. When it comes to A-share technology stocks, one must also consider an additional layer of "chip structure" and trading rhythm. Among sub-directions, optical communications, materials, and domestic computing power remain worth watching.
For investors wishing to build a balanced position for post-holiday market conditions, the CSI A500 ETF (159338) covers leaders across various industries, offering both offense and defense, and may be approached through phased buying on dips.
Celebrating National Day 鈥?wishing all investors a happy holiday! Risk disclosure: Investors should fully understand the differences between regular fixed-amount fund investment and savings methods such as lump-sum deposits and withdrawals. Regular fixed-amount investment is a simple and easy method to guide investors toward long-term investment and average investment costs. However, regular fixed-amount investment cannot avoid the inherent risks of fund investment, cannot guarantee investor returns, and is not an equivalent wealth management alternative to savings. The mentioned funds are equity-type securities investment fund products with relatively higher expected risk and expected return; their expected return and expected risk levels are higher than those of hybrid funds, bond funds, and money market funds. Short-term sector/fund performance is for reference only and does not constitute a guarantee of fund performance. The above views are for reference only and do not constitute investment advice or commitments. If you wish to purchase relevant fund products, please pay attention to the relevant provisions of investor suitability management, complete risk assessment in advance, and purchase fund products with risk levels matching your own risk tolerance. Funds involve risks; investment requires caution. MACD golden cross signals have formed; these stocks are performing well!
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