On Thursday (November 27), the market experienced a day of early gains followed by a pullback, with the Shanghai Composite Index edging up 0.29% to close at 3,875.26 points, while the ChiNext Index erased over 2% of its gains to finish 0.44% lower. Individual stocks were mixed, with the overall market turnover at 1.72 trillion yuan, marking a slight decline for the second consecutive day.
In the market, the hard tech sector, which had seen a sharp rebound in recent days, showed signs of fatigue in the afternoon. Zhongji Innolight, after hitting a new intraday high in the morning, closed down 3.54%. The ChiNext AI ETF (159363), with over 54% exposure to CPO (co-packaged optics), rose as much as 3.3% before retreating to close 0.68% lower, ending a three-day winning streak with an intraday swing of 4.2%.
The electronics sector followed a similar trajectory, with the Electronics ETF (515260) initially surging 3.5% before closing with a modest 0.16% gain. However, institutional buying remained strong, with over 10 billion yuan poured into the sector in a single day, making it the top-performing industry by capital inflow. The sector benefited from a new consumption stimulus plan issued by six government departments.
The chemicals sector outperformed, leading the gains with contributions from electrolyte and solid-state battery concepts. The Chemicals ETF (516020) rose as much as 1.8% in the afternoon before closing 1.3% higher on increased volume. Industry reports indicated a surge in electrolyte prices and strong order books for leading electrolyte producers, with some securing long-term contracts extending to 2028.
Banks once again demonstrated their defensive qualities, with the largest bank ETF (512800) by AUM recovering from early losses to close 0.36% higher, reclaiming its 5-day and 10-day moving averages. As the market remains volatile, opportunities for low-position catch-ups and defensive allocations are emerging, making bank stocks an attractive option.
CITIC Securities noted that the current market may be in a phase of "three-stage overlap": mid-bull market consolidation, critical earnings validation, and a policy vacuum. This could amplify rotational trends and year-end profit-taking. Strategically, short-term opportunities should be seized, with key events like the Fed's December meeting and China's Central Economic Work Conference likely to provide direction. Any significant pullbacks could present buying opportunities.
**ETF Highlights: Chemicals, Banks, and Electronics**
1. **Chemicals ETF (516020) Rises 1.3% as Leading Electrolyte Firms Report Strong Orders; Analysts See 2026 as Turning Point** The chemicals sector led the gains amid the market's pullback, with the Chemicals ETF (516020) rising 1.3% on turnover of 113 million yuan. Key constituents like Xin Feng Ming Group and Wanhua Chemical gained over 3%. The sector has outperformed this year, with the sub-index up 26.07% YTD, surpassing major benchmarks. Solid-state battery concepts and rising electrolyte prices (up to 54,250 yuan/ton from 19,400 yuan/ton at year-start) drove the rally. Valuations remain attractive, with the sector's P/B at 2.27x, near a 10-year low. Analysts expect a cyclical upturn by 2026, supported by supply contraction and demand recovery.
2. **Bank ETF (512800) Turns Positive with 270 Million Yuan Inflow; Agricultural Bank Gains Over 2%** Banks showcased their defensive appeal, with Agricultural Bank of China rising over 2%. The largest bank ETF (512800) reversed early losses to close 0.36% higher, with turnover nearing 1 billion yuan. The sector's P/B of 0.73x remains below global peers, suggesting room for revaluation. Economic recovery and high dividends continue to attract capital. Insurance funds are increasing holdings, and mid-term dividends remain robust. The ETF saw 270 million yuan in inflows over two days, reflecting strong investor interest.
3. **Electronics ETF (515260) Rises 0.16% Amid Policy Tailwinds; Google Supply Chain Accounts for 21% Weight** The electronics sector drew over 10.7 billion yuan in institutional inflows, topping all industries. The Electronics ETF (515260) rose as much as 3.5% before settling 0.16% higher, marking a three-day winning streak. Consumer electronics stocks like Anker Innovations and semiconductor firms like Will Semiconductor led gains. A new consumption stimulus policy targeting smart devices provided a boost. Google's recent breakthroughs also buoyed the sector, with 21.91% of the ETF's index tied to its supply chain. Analysts see AI-driven demand reshaping the electronics industry, offering long-term growth potential.
**Data Source**: Shanghai and Shenzhen Stock Exchanges. **Risk Disclosure**: ETFs track specific indices, and past performance does not guarantee future results. Investors should assess risks based on their profiles.
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