A-share market has been persistently declining in recent sessions, but after hitting a phase low on October 23, it rebounded with heavy volume. What signal does this send?
On October 23, the four major A-share indices all fell sharply in the morning before staging a strong afternoon comeback. The Shanghai Composite Index rebounded significantly after hitting a new low, closing near 3700 points. Ultimately, all four indices closed higher, with the tech-heavy ChiNext Index and the STAR Composite Index rising 4.16% and 3.68% respectively.
That day, several technology companies disclosed recent production and operational conditions as well as industry trends. Some industry insiders analyzed that the announcements show the prosperity signals of the industrial chain are not merely at the expectation level. Chip companies are seeing rapid revenue and profit growth, PCB, optical chip, and testing equipment companies are maintaining strong order momentum, the demand structure for storage products is accelerating its upgrade, and capacity construction and next-generation product validation are advancing simultaneously. Demand across the industrial chain driven by computing power capital expenditure is gradually translating into the operating results of listed companies.
So, after a sustained correction, is the A-share market bottoming out and poised for recovery? Some brokerage analysts believe the current market has already shown bottoming characteristics across multiple dimensions including valuation, chips, and sentiment, and a corrective rally is expected in the short term. Others believe that given the recent disturbances from external variables, the characteristics of repeated index fluctuations, sector rotation, and using time to exchange for space are expected to persist.
According to Ping An Securities, the macroeconomic fundamentals are stabilizing and improving, the policy support orientation is clear, and the structural highlights in listed companies' performance are numerous. Positive factors supporting the stable and healthy development of the capital market are continuously accumulating. Current market turnover and valuations are both in a reasonable range, risks have been largely released, and as the certainty of third-quarter earnings gradually materializes, the market is expected to regain upward momentum.
A-share market rebounds from lows as tech companies collectively speak out
On October 23, the A-share market continued its recent weak trend in early trading, with all four major indices falling sharply. The Shanghai Composite Index briefly lost the 3600-point mark, dipping to a low of 3574.27 points, a new low since August last year. The ChiNext Index also fell below the 2500-point round number during intraday trading, hitting a phase low.
However, the market reversed in the afternoon. The Shanghai Composite Index rebounded from its lows, surging 116.21 points to close at 3690.48 points, approaching the 3700 mark. The ChiNext Index and STAR Composite Index also staged strong comebacks, ultimately rising 4.16% and 3.68% respectively. The Shenzhen Component Index, after falling more than 2% in early trading, also rallied significantly, closing up 2.79%.
That day, combined turnover across the Shanghai, Shenzhen, and Beijing markets approached 2 trillion yuan, a significant volume increase of more than 400 billion yuan from the previous trading day. Broad-based ETFs also saw increased trading volume. Meanwhile, the first batch of 18 active ETFs went on sale on October 23, with a single fund fundraising cap of 2 billion yuan. Static estimates suggest this could bring in approximately 36 billion yuan in incremental capital, as fund companies are sending signals with real money.
Another notable market phenomenon on October 23 was that several technology companies disclosed recent production and operational conditions and industry trends, aiming to release positive signals externally. For example, companies including Cambricon, Biwin Storage, Shengyi Electronics, Yuanjie Technology, Lianxun Instruments, Rongchang Biotech, and Huitai Medical collectively disclosed recent production and operational information. From AI computing power chips, storage, and high-speed interconnect to innovative drugs and interventional medical devices, multiple listed companies conveyed information on performance growth, order reserves, R&D investment, and capacity construction.
Among them, Cambricon believes that as large model technology continues to evolve, the market not only needs more efficient computing hardware to reduce training and inference costs, but also needs more complete software platforms to enhance chip usability, scalability, compatibility, and stability in complex scenarios. The company will continue to maintain high-intensity R&D investment around key directions such as chip platforms and software platforms for large models, strengthening software-hardware co-optimization capabilities.
Beyond disclosing industry trends and operational progress, the relevant companies also disclosed information on dividends and buybacks. For instance, Biwin Storage announced that since 2026 began, the company has completed equity distributions for the 2025 annual and 2026 interim periods, with cumulative cash dividends of approximately 300 million yuan. Meanwhile, the company completed a share buyback on October 19, 2026, with a cumulative buyback amount of approximately 250 million yuan, all of which will be used for cancellation and reduction of registered capital. Its controlling shareholder, actual controller, and chairman Sun Chengsi recently proposed again to buy back 200 million to 250 million yuan worth of company shares for cancellation.
In addition, many companies disclosed third-quarter reports or third-quarter earnings forecasts. As of October 23, among companies that have disclosed earnings forecasts for the first three quarters, more than 80% issued positive guidance. Among them, industries such as computer hardware, semiconductors, chemicals, non-ferrous metals, and pharmaceuticals and biologics performed relatively well. The semiconductor sector saw widespread earnings upgrades, with subsectors like PCB and semiconductor equipment showing outstanding prosperity.
Where does the market go from here?
With the A-share market rebounding from lows and listed companies proactively releasing positive signals, whether the A-share market has adjusted sufficiently and whether it is poised for a rebound have become market focal points.
Since entering the second half of this year, the A-share market has been broadly declining with fluctuations. A rebound occurred in August, but sustained declines resumed from late September. As the market corrected, margin financing balances continued to decline, with previously popular tech stocks in particular seeing large net selling by margin traders. However, recently broad-based ETFs have seen counter-trend net inflows and repeated pulse-like volume spikes near the close.
Xiangcai Securities believes that from a short-term perspective, as the macro short cycle shows signs of peaking, combined with the transmission of overseas tech sector volatility to the domestic market, the A-share market broke below its July low, showing a pattern of lower lows. Although the weak trend in October has taken shape, after the rapid decline the market saw a single-day V-shaped reversal, and the Shanghai Composite Index may build another phase bottom near 3700 points.
Chen Gang, chief strategy analyst at Soochow Securities, also stated that the current market has shown bottoming characteristics across multiple dimensions including valuation, chips, and sentiment. First, valuation levels have fallen to low levels, and the cost-effectiveness of growth sectors is prominent. Second, index volatility has risen to high levels, possessing intrinsic momentum for mean reversion. Third, the chip structure is gradually repairing, and trading congestion is easing. Fourth, from the perspective of large asset class allocation, the value of equity allocation is improving. Fifth, ETF funds are seeing significant net inflows, sending a clear signal of market stabilization.
"The short-term market is expected to see a rebound, and sectors with strong performance, excessive declines, and reasonable valuations will become important levers for obtaining excess returns," Chen Gang believes. This round of market movement is more of a liquidity-shock-style phase adjustment rather than a fundamental reversal of the industrial prosperity logic. As A-share listed companies enter the intensive third-quarter earnings disclosure window, high-prosperity directions with solid fundamental support are expected to stabilize and strengthen first. Therefore, it is necessary to pay attention to the pricing of earnings quality factors in the subsequent recovery rally, and combine valuation levels to explore excess return clues for the rebound.
Everbright Securities also believes that in the short term, the market may enter a "repair window after risk release." On one hand, the recent market adjustment is more of a short-term disturbance from sentiment and trading structure rather than a systemic deterioration of fundamentals. On the other hand, with economic resilience emerging, valuation cost-effectiveness repairing, and policy and capital forming a synergy, the medium-to-long-term allocation value of A-shares is becoming apparent.
"Positive signals in the current market from capital, policy, valuation, and earnings are simultaneously accumulating. Considering that the bearish chips have been fully flushed out in this round, the market is expected to usher in a corrective rally subsequently," said an institutional insider.
Some brokerage analysts also believe that in the short term, the space for panic-driven index declines is limited, and attention should be paid to rebound opportunities after the previous excessive declines. Given the recent disturbances from external variables, the characteristics of repeated index fluctuations, sector rotation, and using time to exchange for space are expected to persist.
According to Ping An Securities, as A-shares enter the intensive third-quarter earnings disclosure period, positive signals from economic fundamentals, policy and capital, and listed company profitability are continuously converging, and market focus is gradually shifting from liquidity expectations to earnings verification. Ping An Securities recommends that investors anchor to the earnings mainline, view the value of quality assets from a long-term perspective, and seize investment opportunities in the economic transformation and upgrading.
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