Traded ValueA-share market 25.10.10
Market News:
Following the Shanghai Composite Index's 1.32% surge on October 9th, hitting a nearly decade-high closing level, the A-share market experienced a technical pullback today. Market sentiment turned cautious after consecutive gains, with profit-taking leading to a collective decline in the three major indices.
Sector Divergence: The market showed structural divergence. Cyclical sectors like natural gas and coal rose against the trend, benefiting from energy price expectations, while previously high-performing sectors such as semiconductors, batteries, and precious metals led the drop, with high-priced stocks undergoing collective adjustments. Low-Volume Adjustment, Future Expectations Remain: Despite the index decline, trading volume shrank compared to the previous session, indicating no panic selling. Analysts believe the short-term pullback is a healthy correction, with upward momentum likely to persist amid macro policy support and gradual market confidence recovery.
Additional Market News: Today’s market focus shifted to cyclical and emerging concept stocks. The non-ferrous metals sector surged 7.60%, driven by global commodity rebounds and infrastructure policy expectations, with stocks like Tongling Nonferrous and Northern Copper hitting limit-up. Nuclear power and controlled fusion concepts remained strong, with HeDuan Intelligent securing four limit-ups in eight days, and Yongding Shares, Antai Technology, and over ten others hitting limit-ups. A Ministry of Commerce announcement further catalyzed the sector. Meanwhile, export controls on ultra-hard materials triggered early rallies in related stocks, though divergence emerged in the afternoon. The cement sector became a "dark horse," with margin traders increasing positions, as institutions anticipate demand recovery amid infrastructure revival.
Technical Analysis:
At the close, the Shanghai Composite fell 0.94% to 3,897 points; the Shenzhen Component dropped 2.7%, and the ChiNext Index saw a steeper decline of 4.55%.
Technical Pattern Analysis: After yesterday’s strong breakout past the 3,900-point milestone, indicators like the bias ratio signaled short-term overbought conditions, making today’s pullback a expected technical correction.
Key Levels: Support: The 3,900-point level, now transitioning from resistance to short-term support. The consensus is that the uptrend remains intact if the index holds this level during the adjustment. Volume: Today’s lower volume suggests limited downward momentum, reflecting a normal "shakeout" during an uptrend.
Sector and Stock Strategy: The current pullback presents structural opportunities. A "defensive + rotation" approach is advised, focusing on cyclical recovery and policy-benefiting sectors, with positions controlled at 60%-70%. Defend 3,900 as a short-term floor, while staying wary of further adjustments in high-valuation tech stocks. Prioritize stocks with earnings inflection points amid Q3 reports. Non-ferrous metals: Top gainer, driven by both industrial and precious metals.
Tactics: Accumulate on dips, hold mid-term until infrastructure peaks. Nuclear/controlled fusion: Hot concept, frequent limit-ups. Speculate short-term, align with policy moves, and cap positions at 15%. Semiconductors/AI: High-level adjustments, supported by localization logic. Build positions in batches, watch for Q3 catalysts, and treat pullbacks as opportunities. Satellite allocations: Light positions for testing.
Overall Risk Warning: If 3,900 is lost, reduce exposure to high-volatility concept stocks and shift to defensive consumer plays.
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