As the 2026 New Year holiday approaches, the A-share market is set for a brief trading suspension. According to arrangements by the Shanghai, Shenzhen, and Beijing Stock Exchanges, markets will be closed from January 1 to January 3 for the New Year holiday, with regular trading resuming from January 5. On December 30, the A-share market experienced increased volatility, with the three major indices collectively opening lower. By the morning close, the Shanghai Composite Index had fallen 0.1% to 3,961.21 points, while the Shenzhen Component Index rose 0.23%, and the ChiNext Index declined 0.06%. After the afternoon session opened, the Shanghai Index quickly climbed into positive territory, ultimately closing flat for the day and achieving a "ten-day winning streak" on its daily chart. Full-day turnover across both exchanges still exceeded 2.1 trillion yuan.
Stock market performance around the New Year holiday has always drawn significant investor attention, serving not only as the finale of annual market trends but also as a bellwether for the new year's opening. Xue Hongyan, a special researcher at Sushang Bank, noted that following 2025's "slow bull" market, risk appetite has substantially recovered compared to last year, with investors' concerns about extreme risks somewhat alleviated—key factors behind the recent strong market performance.
The Shanghai Composite Index's "ten consecutive gains" have raised expectations for a year-end rally. On December 30, the Shanghai Composite Index closed flat at 3,965.12 points, while the Shenzhen Component Index gained 0.49% to 13,604.07 points, and the ChiNext Index advanced 0.63% to 3,242.90 points. Daily A-share turnover reached 2.16 trillion yuan, increasing by 3.3 billion yuan from the previous trading session. Over a longer timeframe, the Shanghai Composite Index has now achieved ten consecutive daily gains. The last occurrence of a "ten-day winning streak" for the Shanghai Index was during the September 2024 "9·24" market surge, when the index rose from around 2,600 points to a peak of 3,600 points.
In terms of sector performance on December 30, humanoid robots, ice-snow tourism, reducers, and automotive parts led gains, while Hainan Free Trade Port, photovoltaic glass, and commercial aerospace sectors experienced significant declines. Regarding individual stocks, over 1,800 companies advanced during the session, with 66 hitting their daily upside limits.
Xue Hongyan indicated that recent A-share market sentiment has noticeably warmed, driven by the convergence of policy, capital, industrial factors, and market sentiment. The Central Economic Work Conference clearly emphasized "guiding the development of new quality productive forces through technological innovation," while expectations strengthened for coordinated fiscal and monetary policy support. Secondly, capital flows exhibited characteristics of "resonance between domestic and foreign funds"—not only have margin trading balances and private fund positions steadily increased, but broad-based products like the CSI A500 ETF have also received substantial net subscriptions, creating sustained incremental capital inflows. Meanwhile, cutting-edge technology sectors such as commercial aerospace and humanoid robots have become core focuses attracting market attention, driven by both policy support and technological breakthroughs.
Institutions hold divergent views regarding the anticipated "year-end rally." China Galaxy Securities' research report suggests that since December, the A-share market has displayed a year-end rally characterized by leadership from growth styles, divergence between large and small caps, and risk appetite-driven momentum. Rising expectations for Fed rate cuts in December offset negative impacts from Japan's rate hikes, while the offshore yuan breaking through the 7.0 level enhanced the attractiveness of yuan-denominated assets. Capital has been flowing out of traditional economic sectors into areas representing national security, technological self-reliance, and strategic resources, with widespread market expectations for concentrated credit and fiscal quota allocations early next year and the "Two Sessions," creating consensus around buying on dips to position for spring行情.
However, a recent research report from Guosheng Securities indicates that year-end rallies are not certain events, having occurred only five times in the past decade—a mere 50% probability. Guosheng Securities stated that the 2026 year-end rally possesses some foundation, with supporting factors including: first, maintained loose liquidity conditions domestically and internationally, as the 2025 Central Economic Work Conference explicitly mentioned "flexible" RRR and interest rate cuts, while the Fed remains in a rate-cutting cycle; second, relatively abundant stock market liquidity, with insurance capital's new premium income likely maintaining high equity allocations amid an "asset shortage" backdrop; third, sustained market consolidation throughout 2025's fourth quarter, meeting "accumulation" conditions. Nevertheless, the report also noted that current market conditions still face some uncertainty factors that may limit upside potential.
According to Wind data, between 2021 and 2025, the Shanghai Composite Index recorded gains in the first week after New Year's market reopening twice—in 2021 and 2023, with first-week increases of 2.79% and 2.21% respectively—while 2025 saw a significant first-week decline of 5.55%.
Financial institutions are actively promoting cash management products, with minimum investments as low as 0.01 yuan. As the holiday approaches, many investors are debating whether to hold stocks or cash during the break. Li Jiang (pseudonym), an investor from Jiangxi, mentioned maintaining full portfolio positioning currently, with recent minor pullbacks in held stocks but overall floating profits. "I don't plan to sell now, waiting until next year to reduce positions appropriately when conditions permit."
Notably, approaching the New Year holiday, numerous banks, wealth management companies, and fund companies are heavily promoting their cash management, short-term fixed income, and money market fund products. A December 29 article on China Merchants Bank Wealth Management's official account highlighted that their cash products operate 24/7, with purchases before 24:00 on December 30 qualifying for four additional days of returns. These products primarily invest in high-security, high-liquidity assets with accessible thresholds—some products allow investments starting from 1 yuan or even 0.01 yuan. Additionally, multiple short-term bond wealth management options are available, with some products delivering annualized returns above 3% since inception.
ChinaAMC Wealth Management's official account also published an article on December 30 promoting their ChinaAMC Cash Management No. 70 Product A, featuring a recent one-month annualized yield of 1.44%, similarly offering a 0.01 yuan minimum investment threshold and supporting 24-hour subscription and redemption on trading days.
Xue Hongyan analyzed that the New Year trading suspension is brief, and markets typically react quickly to post-holiday policy and industrial catalysts. Therefore, if held positions already possess clear short-term catalysts before the holiday and can withstand potential external volatility risks, holding stocks to capture post-holiday momentum opportunities may be considered. Conversely, if avoiding uncertainty is the primary goal, holding cash and waiting remains more prudent.
Xue further elaborated that for those choosing to hold stocks through the holiday, short-term focus should center on sectors currently attracting capital and exhibiting high sentiment heat: first, the technology growth theme, particularly artificial intelligence and commercial aerospace sectors receiving sustained policy mentions and industrial progress; second, sectors directly benefiting from market sentiment recovery, such as securities firms; third, sectors with short-term price catalysts or peak season expectations, like non-ferrous metals influenced by international price fluctuations. "The core principle is avoiding chasing sectors that have already significantly priced in expectations while strictly controlling position sizes to manage post-holiday opening volatility," Xue emphasized.
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