A-share market staged an intraday recovery on October 13, with the Shanghai Composite Index gaining a modest 0.1% to reclaim the 3,800-point level, while the Shenzhen Component Index and ChiNext Index both touched fresh one-year lows before being pulled up from deep losses near the midday break, narrowing their declines to 0.25% and 0.18% respectively at the close. Total market turnover expanded to 1.69 trillion yuan.
Recovery on the AI hardware side injected a strong boost into the market, with optical module stocks leading a counterattack in the afternoon. The high-light ChiNext Artificial Intelligence ETF Huabao (159363) staged a dramatic reversal, with a full-day amplitude of 6.87%, its underlying index surging past 3% in the afternoon before closing up 1.84% on significantly expanded volume, reflecting continued investor interest in positioning opportunities. The market bellwether also contributed, as brokerage stocks broadly turned positive intraday, with the Brokerage ETF Huabao (512000) surging from below water. The bellwether 2.0 also joined the rally, as the underlying index of the Fintech ETF Huabao (159851) rose more than 2% in the afternoon before closing up 1.12%.
Following midday news about an airshow, the defense sector surged in a straight line, leading the entire market, with the underlying index of the Defense ETF Huabao (512810) briefly climbing over 3%, and the underlying index of the General Aviation ETF Huabao (159231) reaching a high of 2.57%. The 16th China Airshow will be held in December, featuring the debut of multiple types of main combat equipment from the Air Force and reusable rockets. Tensions in the Strait of Hormuz resurfaced, keeping the oil and petrochemical sector active throughout the day, with Heshun Petroleum hitting the daily limit and China Merchants Energy Shipping rising 6.55%, while the underlying index of the Oil ETF Huabao (159019) touched a high of 2% intraday. Institutions noted that short-term geopolitical risks still provide strong support for international oil prices.
Analysts pointed out that A-shares are entering a critical window in the fourth quarter, with external Federal Reserve disturbances gradually materializing and risk pricing relatively sufficient, domestic fundamentals steadily underpinning the market, and third-quarter earnings verification adding further clarity, as market uncertainty converges and opportunities for style rebalancing and mainline reshaping emerge. Institutions generally believe that a year-end recovery rally may still be expected, with technology growth likely to return as the core mainline, while dividend, pharmaceutical, and overseas expansion themes may contribute in a coordinated manner.
ETF Hotspot Review: Defense, ChiNext AI, and Oil Themes
The following focuses on the trading and fundamental conditions of several thematic sectors including defense, ChiNext artificial intelligence, and oil.
1. Defense Sector Posts the Largest Gain! 512810 Underlying Index Surges 3%, Leading Stock Jumps Over 12%! Major Positive News Sparks Rising Trade Expectations
The defense sector erupted in the afternoon, leading the entire market after a long absence! The CSI Defense Index fell as much as 1.87% in early trading, began to rally before midday, surged over 3% in the afternoon, and closed up 2.4%, with the Defense ETF Huabao (512810) tracking the index simultaneously reversing to close higher. Notably, just yesterday, the exchange closing price of 512810 hit a near one-year low.
Among constituent stocks, Guoke Defense led gains at 12.24%, AVIC-related stocks performed brilliantly, Hongdu Aviation closed up 9.75% after touching the limit, AVIC Chengdu Aircraft rose 8.19%, and AVIC Xi'an Aircraft rose 6.12%. Major news broke on the information front! CCTV News reported in the afternoon that the 16th China International Aviation and Aerospace Exhibition will be held from December 7 to 13, 2026 in Zhuhai, Guangdong. At this airshow, multiple types of main combat equipment from the Air Force will make their debut, reusable rockets will be displayed, and a drone and counter-drone systematic demonstration platform will also appear. In addition, AVIC recently brought its full-spectrum multi-type aviation equipment to the 2026 Azerbaijan International Defense Exhibition and the Marrakech Airshow, showcasing China's achievements in the systematic development of aviation equipment, strengthening precision marketing efforts in markets such as North Africa, and injecting new momentum into further deepening the aviation export market.
CICC noted that international airshows are concentrated display windows for aviation and other special equipment, and China's equipment appearing demonstrates its growing influence in the global equipment market, helping to further open overseas markets. The firm is optimistic about defense sector allocation opportunities before year-end and recommends sub-sectors such as military trade and large aircraft. According to a China Merchants Securities research report, global military trade deliveries exceed $120 billion, with China currently accounting for about 5.8%. Breaking down the structure, aviation equipment accounts for over 40% of military trade, helicopters 10%, and air defense, anti-missile, and missile systems 10%. With aviation equipment accounting for a high proportion, China's manned aircraft and air defense and anti-missile equipment markets have enormous room for future breakthroughs.
For defense investment, choose the one with "August First" in its code. The Defense ETF Huabao (512810) (formerly the National Defense ETF) passively tracks the CSI Defense Index, comprehensively covering popular themes such as military trade, commercial aerospace, large aircraft, and low-altitude economy. It is also a margin trading and stock connect eligible target, serving as an efficient tool for one-click investment in core defense assets.
2. Deep-Water Rebound! High Earnings Growth Plus Supply-Demand Gap Resonance, High-Light ChiNext AI ETF (159363) Underlying Index Rises Nearly 2% on Heavy Volume
Optical module leaders surged rapidly in the afternoon, with the underlying index of the high-light ChiNext Artificial Intelligence ETF Huabao (159363) pulling up from -3.5% below water, surging over 3% intraday, and closing up 1.84% on significantly expanded volume, as capital continued to focus on positioning opportunities recently. Among popular individual stocks, T&S Communications rose over 8%, Tianfu Communication and Dongtian Micro rose over 7%, Linktel Technologies, Changxin Broadcom, and O-Net Technologies rose over 5%, while Zhongji Innolight and Eoptolink rose over 1%, ending a nine-day losing streak.
On the news front, two major optical communication concept stocks both announced high third-quarter earnings growth, verifying strong demand and high prosperity in the optical communication industry. This signal strengthened market optimism toward the optical module sector and boosted confidence in the earnings certainty of optical module leaders. Improved expectations attracted capital inflows, increased buying pressure, and ultimately drove today's rebound in optical module leaders.
Additionally, the supply-demand gap highlights the industry's high prosperity, further corroborating the rebound logic for optical module leaders. On the industry side, Lumentum CEO Hurlston stated on Friday local time that the company's optical component capacity through early 2029 has been completely sold out. Hurlston said that for some products, about 70% of demand still cannot be met through next year, and for other products, about 30% of demand still cannot be met through 2028.
Guolian Minsheng Securities noted that as overseas CSPs continue to increase AI infrastructure investment and training and inference cluster scales continue to expand, the value and technical barriers of communication networks in computing power systems are expected to continue rising. On one hand, 1.6T/3.2T high-speed optical modules remain in a continuous upgrade cycle, and new architectures such as NPO/CPO and OCS are expected to further open incremental space in areas including optical engines, optical chips, and optical components; on the other hand, demand for high-speed switches, data center network equipment, and AIDC infrastructure is also expected to continue benefiting. In terms of allocation, the institution recommends continuing to position in the communication sector around the AI computing power mainline, focusing on high-speed optical modules and upstream core optical components, new technology directions such as NPO/OCS, and data center switches and the AIDC industry chain benefiting from AI network expansion.
*To position in optical module leaders plus AI applications, consider the ChiNext Artificial Intelligence ETF Huabao (159363) and its off-exchange feeder funds (Class A 023407, Class C 023408), focusing on optical module CPO leaders while also covering AI applications. The underlying index has over 35% weight in "Zhongji Innolight + Eoptolink + Tianfu Communication," making it a core bellwether for AI computing power. Note: As of September 30, 2026, according to the China Securities Index, the top three constituents of the ChiNext Artificial Intelligence Index are Eoptolink (12.98%), Zhongji Innolight (12.09%), and Tianfu Communication (10.8%).
3. Strait of Hormuz Tensions Resurface! Geopolitical Situation Ignites Oil Shipping Sector, Oil ETF Huabao (159019) Underlying Index Rises Over 1%
The oil and petrochemical sector was strong almost all day today. Shipping, oil extraction, and other sectors saw some individual stocks among the top gainers. At the close, Heshun Petroleum hit the daily limit, China Merchants Energy Shipping rose over 6%, and Guanghui Energy, COSCO Shipping Energy Transportation, and China Merchants South Oil also ranked among top gainers. The underlying index of the Oil ETF Huabao (159019), the CSI Oil and Gas Index, closed up 1.54%. Note: As of the October 12 close, in the CSI Oil and Gas Index, the weights of Heshun Petroleum, China Merchants Energy Shipping, Guanghui Energy, COSCO Shipping Energy Transportation, and China Merchants South Oil were 0.36%, 4.43%, 4.67%, 3.83%, and 2.49% respectively.
On the news front, multiple maritime notices issued by the UK Maritime Trade Operations office showed that six vessels were attacked successively in the Strait of Hormuz and nearby Gulf of Oman waters on October 11. In addition, Iran's Islamic Revolutionary Guard Corps Navy stated on October 12 that it struck a large oil tanker in violation of regulations in the Strait of Hormuz earlier that day. Analysts noted that as long as tensions persist, freight rates will remain elevated, and insurance costs and logistics challenges will continue to push up crude oil delivery costs.
Ping An Securities noted that significant uncertainty remains in the US-Iran conflict, the geopolitical stalemate is unresolved, and traffic through the Strait of Hormuz is still far below normal levels; at the same time, the Yemen situation is still escalating, with Houthi attacks on Saudi oil facilities, and the Houthis' involvement may also obstruct crude oil transportation through the Red Sea's Bab el-Mandeb Strait. Combined with US crude oil inventories still at historically low levels, short-term geopolitical risks still provide strong support for international oil prices.
*China Galaxy Securities believes that geopolitical conflicts are expected to recur, and short-term Brent crude oil prices may broadly fluctuate in the $90-110 per barrel range. It recommends closely monitoring US-Iran negotiation progress, the actual operational status of key oil transportation routes, and the operational status of oil production facilities in the Gulf region going forward.
*Regarding specific allocation, Huayuan Securities noted: (1) geopolitical factors have caused overseas refinery supply to contract, and refinery prosperity may remain at a relatively good level, with attention possibly on selected high-quality refineries; (2) if oil prices remain at medium-to-high levels alongside relatively good olefin prosperity, upstream oil and gas companies and coal chemical and gas-based chemical enterprises may undergo value reassessment.
*For one-click positioning across the entire oil and gas industry chain and to capture the dividends of the energy security era, focus on the Oil ETF Huabao (159019). The Oil ETF Huabao (159019) tracks the CSI Oil and Natural Gas Index, with a constituent portfolio providing one-click coverage of 50 A-share stocks in oil and natural gas exploration and development, oil and gas equipment and services, gas transmission and distribution sales, and other oil and natural gas industry-related fields, with the "three barrels of oil" accounting for nearly 40%. Note: As of the end of September 2026, in the CSI Oil and Gas Index, the weights of PetroChina, Sinopec, and CNOOC were 15.9%, 12.45%, and 13.25% respectively.
Data sources: China Securities Index Company, Shanghai-Shenzhen-Hong Kong exchanges, iFind, etc.
Institutional views: 1. CICC, October 13, 2026, "Special Trade Welcomes Continuous Catalysts, Focus on Progress in Emerging Fields." China Merchants Securities, October 13, 2026, "Value Military Trade for Breakthroughs in the Defense Industry, Military-to-Civilian Transition Opens Broad Space." 2. Guolian Minsheng Securities, "Passive Components Prosperity Expected to Continue, Focus on Third-Quarter Earnings Performance." 3. Ping An Securities, October 11, 2026, Oil and Petrochemical Weekly, "Geopolitical Stalemate Difficult to Resolve Short-Term, International Oil Prices Oscillate Strongly"; China Galaxy Securities, October 8, 2026, "Geopolitical Conflicts Recur, Overseas Oil Product Prosperity Continues"; Huayuan Securities, October 12, 2026, "Q3 Oil Prices Decline Quarter-on-Quarter, Petrochemical Industry Overall Performance May Face Pressure — Oil and Petrochemical Industry 2026 Third-Quarter Earnings Preview."
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Special notice: According to the fund manager's assessment, the risk levels of the ChiNext Artificial Intelligence ETF Huabao and its feeder funds are both R4-medium-high risk, suitable for aggressive (C4) and above investors. The risk levels of the other funds mentioned in this article are all R3-medium risk, suitable for balanced (C3) and above investors. Appropriate matching opinions should be based on the sales institution's assessment.
Risk warning: Individual stocks mentioned in this article are merely objective demonstrations and listings of index constituent stocks, not recommendations for any individual stock, and do not represent the fund manager or fund investment direction. 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, and investors must be responsible for their own investment decisions. In addition, any views, analysis, and forecasts in this article do not constitute any form of investment advice to readers, and the company assumes no responsibility for direct or indirect losses caused by the use of this article's content. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary to understand the risk-return characteristics of the fund and choose products suitable for their own risk tolerance. Past performance of a fund does not predict its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Sales institutions (including the fund manager's direct sales institution and other sales institutions) conduct risk assessments of the above funds in accordance with relevant laws and regulations, and investors should promptly pay attention to the appropriateness opinions issued by the fund manager. Appropriateness opinions among sales institutions are not necessarily consistent, and the fund product risk level evaluation results issued by fund sales institutions shall not be lower than the risk level evaluation results made by the fund manager. Differences exist between fund risk-return characteristics and fund risk levels in the fund contract due to different considerations. Investors should understand the risk-return situation of the fund, carefully select fund products based on their own investment objectives, duration, investment experience, and risk tolerance, and bear risks themselves. The registration of the above funds by the China Securities Regulatory Commission does not indicate that it has made a substantive judgment or guarantee on the investment value, market prospects, and returns of the above funds. Fund investment requires caution. MACD golden cross signals have formed, and these stocks have performed well!
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