To The Moon

In the context of a collective rebound across overseas markets, A-shares have begun to follow suit, with all four major indices closing in positive territory.

It should be noted, however, that volatility remained pronounced during the rebound, and capital has yet to form a stable consensus on the long side amid rapid rotation.

Some analysts suggest that Wednesday's rebound is better characterized as a corrective bounce following overselling rather than the confirmation of a trend reversal.

Looking ahead, changes in trading volume and the sustainability of leading sectors are key factors determining whether the index rebound can continue.

On October 28, the Shanghai Composite Index opened higher directly above its 5-day moving average and fluctuated around the opening level throughout the session, with weakness in heavyweight stocks exerting notable pressure on the index.

The Shenzhen Component Index opened higher and then oscillated upward, with the index's center of gravity rising steadily and closing back above its 5-day moving average.

The ChiNext Index put in a standout performance, surging more than 3% on the back of strong gains in heavyweight stocks.

As of the close, the Shanghai Composite Index stood at 3,681.47 points, up 0.91%; the Shenzhen Component Index closed at 11,473.18 points, up 2.02%; and the ChiNext Index ended at 2,634.76 points, surging 3.4%.

Along with the index rebound, trading volume also expanded, with combined turnover across the Shanghai, Shenzhen, and Beijing markets reaching 1.64 trillion yuan, an increase of nearly 170 billion yuan from the previous trading day.

On the board, communication equipment, electronic components, semiconductors, and consumer electronics sectors led the gains.

Meanwhile, liquor, marine equipment, livestock farming, and hotel and catering sectors retreated against the trend.

At the individual stock level, more than 4,100 stocks across the market closed higher, the number of limit-up stocks increased to 74, and only slightly more than 1,200 stocks declined.

Regarding the A-share rebound, some analysts believe that externally, Asia-Pacific markets have been recovering broadly in recent sessions, lifting global risk appetite; internally, some major institutional players such as annuity funds, insurance companies, and public mutual funds have ramped up buying recently, providing marginal incremental capital to the market.

Third-quarter reports for 2026 public mutual funds show that AI computing power and semiconductors remain the core overweight positions, and the trend of institutions crowding into technology leaders is still evident.

At the same time, improving third-quarter earnings at some companies, combined with industrial catalysts in semiconductors, storage, and optical modules, have strengthened the foundation for the technology sector to stabilize.

With domestic and external factors resonating, market sentiment has staged a temporary recovery, but the sustainability of incremental capital and the pace at which industrial catalysts materialize still need to be tracked.

On the sustainability of the rebound, changes in trading volume and the staying power of leading sectors are important influencing factors.

"Capital has not yet fully formed a consensus expectation, and short-term fluctuations may still occur," said Yang Changlong, a senior investment advisor at Jufeng Investment Advisory, in an interview with a reporter from this publication.

"At present, it cannot yet be confirmed that this round of adjustment has bottomed out. A more reasonable judgment is that sentiment repair has already occurred, and the sustainability of the rebound still needs to be verified by volume-price structure and the relay of leading sectors," Yang Changlong said.

Yang Changlong believes that if trading volume subsequently shrinks or the staying power of leading sectors weakens, rebound expectations should be lowered; if volume expands and the index stabilizes with a continuous recovery, right-side participation can be gradually increased.

In terms of operations, a strategy of buying on dips in batches while controlling position size can be adopted, with a focus on directions that have earnings support, clear industrial catalysts, and good capital absorption.

For stocks that fell sharply earlier without a significant deterioration in fundamentals, investors may moderately speculate on a rebound, but they need to simultaneously track changes in volume, the continuity of leading sectors, and external liquidity expectations.

Huayuan Securities stated that the current price-to-earnings ratio of the CSI 300 Index is only 12.8 times, sitting at the 0.7th percentile over the past year and the 50th percentile over the past decade; the price-to-earnings ratio of the ChiNext Composite Index has fallen back to the 10th percentile over the past five years.

In addition, equity ETFs have seen cumulative net inflows exceeding 350 billion yuan over the past month, mainly flowing into broad-based ETFs, with bottom-fishing incremental capital forming support.

Overall, after sustained corrections, four major conditions—market valuation, corporate earnings, capital structure, and cross-asset comparison—have improved simultaneously, and A-shares have ushered in a new allocation window. Investors are advised to steadily position for medium- to long-term opportunities amid divergent views.