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On January 6th, the A-share market wrote two new records into history: the Shanghai Composite Index closed at 4083.67 points, marking a nearly ten-year closing high; simultaneously, its 13 consecutive days of gains broke a 33-year-old record for the longest winning streak.
Trading volume surged to 2.83 trillion yuan that day, reflecting intense bullish sentiment. Investors quipped, "The 4000-point level has transformed from a toll booth into a gas station."
Institutional analysis indicates that the core driving force behind this rally lies in the continuous inflows of capital from insurance funds, margin financing, and foreign investment.
Amid expectations for strong "New Year opening" fund flows, industry insiders believe the spring rally has commenced, with the style of the A-share market in 2026 evolving toward a more balanced, comprehensive bull market.
January 6th saw all three major A-share indices close higher. The Shanghai Composite Index rose 1.50% to 4083.67 points, not only surpassing the high from last November but also reaching its highest level in over a decade; the Shenzhen Component Index gained 1.4%, and the ChiNext Index advanced 0.75%.
The Shanghai Composite Index achieved a 13-day winning streak, setting a new historical record for consecutive gains. The previous record was set between February 25, 1992, and March 11, 1992, when the index recorded 12 straight days of gains, a record that had stood for 33 years.
Sector-wise, the brain-computer interface sector surged again, with nearly 20 stocks like Sanbo Brain Hospital and Weisi Medical hitting the daily limit-up; the commercial aerospace sector continued its ascent, with eight stocks including China Satellite Communications and Goldwind Science & Technology reaching the limit-up, among which China Satellite Communications achieved its fourth limit-up in six trading days; the non-ferrous metals sector was active, with stocks like China Molybdenum and Zijin Mining Group hitting new historical highs; the chemical sector strengthened significantly, with stocks like Chlor-Alkali Chemical sealing their limit-up; major financial sectors including insurance, securities, and internet finance also performed strongly, with New China Life Insurance and China Pacific Insurance both hitting new highs, while Hualin Securities and Huaan Securities reached the limit-up.
During the first two trading days of 2026 (January 5th - January 6th), the Wind Brain-Computer Interface Theme Index surged 12.97%, and the Wind Commercial Aerospace Theme Index jumped 9.49%.
Data from Geshang Fund shows that, by sector, non-ferrous metals, non-bank financials, basic chemicals, and defense military led the gains on January 6th.
Analyzing this, Geshang Fund researcher Tuo Hejiang noted that resource products are strengthening amid expectations of global supply chain restructuring, while the broker and insurance sectors are performing strongly due to expectations for robust "New Year opening" fund flows in 2026.
Capital is actively positioning for the 2026 market outlook.
Invesco Great Wall Fund pointed out that market expectations for a spring rally are strong, with capital making early moves for the 2026行情, especially after a pre-holiday tech IPO application was accepted, expected to raise 29.5 billion yuan. Such large tech company IPOs often provide significant thematic catalysts for the tech sector.
Furthermore, the market holds high expectations for capital inflows resulting from financial institutions' "New Year opening" activities.
"Insurance institutions have achieved good results with their 'New Year opening,' leading to a substantial amount of new premium income available for market allocation at the start of the year, forming the core supportive logic for the capital side," analyzed Invesco Great Wall Fund.
Tuo Hejiang analyzed that the primary driver of this rally stems from sustained capital inflows.
On one hand, insurance capital is accelerating its entry into the market; by the end of September 2025, insurance funds' allocation to stocks and funds reached 5.59 trillion yuan, an increase of 1.49 trillion yuan since the start of the year.
On the other hand, margin financing balance reached 2.54 trillion yuan on January 5, 2026, a new historical high. Additionally, a stronger Renminbi coupled with global liquidity easing has enhanced foreign investors' willingness to allocate to Chinese assets.
Rongzhi Investment fund manager Xia Fengguang observed that after the New Year holiday, the market rose for two consecutive trading days with significantly amplified volume, with major broad-based indices from the SSE 50 to the Shanghai Composite breaking through last year's highs.
"This indicates a high degree of market consensus on the spring rally, with long-term funds, margin trading funds, and funds that exited in the fourth quarter returning to form a combined force," said Xia Fengguang.
Yongying Fund believes that, "Amid the resonance of multiple factors including global liquidity easing, expectations for Fed rate cuts, Renminbi appreciation expectations, and anticipated foreign capital回流, China's core assets remain highly attractive, and the market is expected to maintain an overall upward trend."
"The Shanghai Composite Index hitting a 10-year high and breaking through previous resistance is not solely driven by short-term sentiment. The current market is gradually shifting from the 'valuation-driven' phase of 2025 toward an 'earnings-driven' phase in 2026, with the core driver transitioning from loose liquidity to corporate profit growth, presenting a trend toward more balanced market styles," pointed out Yongying Fund.
Shangyi Fund General Manager Wang Zheng similarly believes, "This rally is not merely a result of short-term exuberance, but rather a gradual alignment of heat with medium-to-long-term trends, coupled with asset appreciation due to the US dollar interest rate cut cycle. This rare 13-day winning streak, breaking the historical record of 11-day streaks seen in the 2006 and 2018 rallies, demonstrates investors' expectations and confidence in the future market outlook."
Yang Delong, Chief Economist of Qianhai Kaiyuan Fund, stated that the market style will become more balanced, with previously lagging high-quality leading stocks expected to see valuation repair opportunities. Besides the ever-present tech theme, sectors including consumer blue-chips, new energy leaders, as well as military industry and non-ferrous metals, are all expected to experience rotational gains.
Chen Xingwen, Chief Strategy Officer of Heiqi Capital, noted that the Shanghai Composite Index refreshing its decade-high on January 6th is a phenomenon certainly not driven by short-term sentiment alone.
From the perspective of the domestic macroeconomic landscape, China's economy is in a phase of sustained recovery, with the PMI remaining above the boom-bust line for multiple consecutive months, industrial added value growing steadily, corporate profits recovering, and the STAR Market seeing net profit growth of 28%, all providing solid fundamental support for the stock market.
Amid the optimistic atmosphere, some institutions remain cautious about the current market. A CEO of a private fund expressed a different view: "The current situation is driven by low interest rates supporting A-share valuations through short-term financing."
Geshang Fund's Tuo Hejiang reminded investors that sentiment in some sectors is overheated in the short term, with leverage from margin financing rising rapidly, warranting caution against volatility risks and advising against chasing highs. Concurrently, valuations in some sectors are excessively high, creating pressure for earnings delivery; if high-growth earnings fall short of expectations, it could lead to valuation corrections.
Zhang Kexing, General Manager of Gray Assets, also believes that although the overall trend for the year should still be volatile upward, short-term fluctuations around the 4000-point level cannot be ruled out.
"Caution is needed towards sectors that have seen particularly large short-term gains but may lack cash flow support," Zhang Kexing specifically mentioned, adding that while further new highs for precious metals like gold and silver cannot be ruled out, entering positions at these levels carries risk.
Yongying Fund believes the current market performance is characterized by active trading and accelerated sector rotation. Supported by policy expectations, front-running capital, and improving fundamentals, this round of行情 is expected to have strong sustainability, "but attention needs to be paid to the persistence of capital inflows and the delivery of annual report results."
Faced with the market's historic performance, institutions generally recommend a strategy of balanced allocation.
At the industry level, Invesco Great Wall Fund suggests focusing on four directions: First, high-growth sectors where AI remains the most exciting industrial主线; Second, resilient external demand, where出海 remains a relatively certain growth opportunity currently; Third, domestic demand, where if policy focus on countering economic downward pressure continues to increase, opportunities for a turnaround in distressed domestic demand-related areas are worth watching; Fourth, high-dividend stocks, which lagged in gains during 2025 but may already offer relatively high allocation value from an absolute return perspective.
Yongying Fund considers a "barbell strategy" viable: on the offensive end, focus on tech growth sectors, including the entire AI industry chain, semiconductors, low-altitude economy, and other new productive forces; on the defensive end, focus on high-odds pro-cyclical assets, such as non-ferrous metals, chemicals, and new energy.
Zhang Kexing is also adopting a two-pronged approach, "Our allocation is primarily focused on the artificial intelligence sector, such as tech internet, and sectors related to consumption recovery."
Chen Xingwen is similarly optimistic about technology and consumption.
Rongzhi Investment's Xia Fengguang advises investors: "Avoid short-term speculation and chasing highs. Base your decisions on the long-term direction of industries and the value of dividend assets, and seize opportunities from these two perspectives."
Geshang Fund's Tuo Hejiang believes that in the current market environment, several areas possess investment value: tech growth, resource commodities, and high-dividend stocks.
Tuo Hejiang argues that on one hand, during the critical phase of China's economic transformation and upgrading, tech growth remains the absolute主线, with key focus on semiconductors, AI, robotics, innovative drugs, etc. On the other hand, globally, in an environment of a weak US dollar super-cycle coupled with manufacturing recovery, resource commodities have become a dual asset offering both "hedging + pro-cyclical" characteristics, undergoing systemic value reassessment.
Shangyi Fund's Wang Zheng recommends adhering to the broad direction of "more commodities and equities, less bonds," allocating to tech growth tracks like brain-computer interface and AI computing power—these cutting-edge fields; simultaneously, pay attention to raw materials like copper and aluminum and upstream cyclical industry chains.
A private fund CEO suggested prioritizing the allocation to Hong Kong-listed consumer and internet companies with valuations around 10 times P/E.
"Regardless of whether the market is bullish or bearish, high-quality companies with sound fundamentals and attractive valuations are the preferred choice," stated the aforementioned private fund CEO.
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