A-share closing review | A-shares rise and fall back, with the three major indexes all closing up more than 1%, and the trading volume in both markets surpassing one trillion.

On September 25th, the three major indexes rose to a high and then fell back collectively, with the ChiNext and Shenzhen Component Index rising by more than 3% at one point during the day. By the close, the Shanghai Composite Index rose by 1.16%, reaching 2900 points briefly before falling back, the Shenzhen Component Index rose by 1.21%, and the Growth Enterprise Market Board Index rose by 1.62%. On the market, the diverse financial and securities sectors continued to surge. Stocks such as Shenzhen Infogem Technologies, Huafon Microfibre, Minmetals Capital, Cofco Capital Holdings, and Tianfeng hit their daily limit up. AI application concepts such as Sora, media, and short video also showed strength, with stocks like FS Development Investment Holdings, Beijing Zhidemai Technology, Huayang OURGAME, TVZone Media, and Hunan TV & Broadcast Intermediary hitting their daily limit up. State-owned enterprise reform and mergers and acquisitions concepts also continued to be strong, with stocks like Yonghui Superstores, Hainan Shuangcheng Pharmaceuticals, and Vantone Neo Development Group hitting their daily limit up. The military industry chain also saw a boost in the afternoon, with stocks like Baota Industry and Shanghai Aerospace Automobile Electromechanical hitting their daily limit up. Only a few sectors like liquor and beer showed weakness, while high-quality stocks continued to plummet, with CCCG Real Estate Corporation hitting the floor limit while Baoding Tianwei Baobian Electric, Datang Telecom Technology, and Shenzhen Huaqiang Industry approached the floor limit. Overall, more stocks rose than fell, with over 4100 stocks rising in the entire market. The trading volume in Shanghai and Shenzhen reached 1.1574 trillion, an increase of 186 billion from the previous trading day, surpassing one trillion for the first time since May 6th. In terms of main funds flow, funds favored industries such as IT services, advertising and marketing, and military electronics, while funds fled industries such as communications equipment, liquor, and securities. Institutional views: Looking ahead, although the bottom logic of the stock market still depends on the economic situation, the current A-share valuation is at historically low levels. With the stimulus of significant positive news, a comprehensive valuation repair in the market is worth looking forward to. China Securities Co., Ltd.: Looking forward to a market-wide valuation repair under the stimulus of significant positive news On September 24th, the State Council Information Office held a press conference announcing a large number of forthcoming policy initiatives, including the establishment of two new monetary policy tools to support the stable development of the stock market. This policy shift will have far-reaching implications for the market and will lay a solid foundation for the long-term stable development of the stock market. Although the bottom logic of the stock market still depends on the economic situation, the current A-share valuation is at historically low levels. With the stimulus of significant positive news, a comprehensive valuation repair in the market is worth looking forward to. CITIC Securities: Stock market may experience some setbacks in the short term after a big rise, but the rebound is expected to continue According to a CICC research report, the current valuation of the A-share market is in a more extreme position, with the forward valuation of the SSE 300 index near the historical lowest standard deviation, with both horizontal and vertical attractiveness for investment; trading and behavioral aspects also show common bottom characteristics in history, with the turnover rate of A-shares calculated by free float market value at about 1.5%, which is at a historical low level (between 1%-2%) for bottom periods. In this context, positive policy signals are expected to boost investor sentiment. After the big rise on September 24th, the stock market may experience some short-term setbacks, but the rebound is expected to continue. The market's trend stabilization still needs to pay attention to changes in the fundamental expectations of listed companies. CITIC Securities: A package of financial policies implemented, beneficial to the fundamental expectations of banks According to a research report from CITIC Securities, the press conference of the three ministries of monetary policy and financial supervision announced a package of financial policies to support the real economy, with a clear intention to boost market confidence. For banks, the adjustment of the existing mortgage loan interest rates has a negative impact on bank asset pricing, while subsequent reductions in LPR and deposit rates will have a neutral impact on bank interest margins. The introduction of swap tools will provide non-bank institutions with financing convenience and targeted investments in the stock market, while re-lending tools will help listed companies repurchase and increase their stock holdings. Stocks with good qualifications and liquidity of index weights have more operational space, and listed banks are expected to benefit directly. Hot sectors: 1. The large financial sector continues to surge The diverse financial, trust, internet finance, and securities sectors continue to surge, with stocks like Shenzhen Infogem Technologies, Huafon Microfibre, Minmetals Capital, Cofco Capital Holdings, Tianfeng, and Anhui Xinli Finance hitting their daily limit up. Review: A research report from CITIC Securities pointed out that the press conference of the three ministries of monetary policy and financial supervision announced a package of financial policies to support the real economy, with a clear intention to boost market confidence. 2. The real estate sector surged at one point Real estate stocks surged at one point, with Financial Street Holdings, Guangdong Shirongzhaoye, Vantone Neo Development Group, and Yang Guang Co., Ltd. hitting their daily limit up. Review: On September 24, 2024, Pan Gongsheng, Governor of the People's Bank of China, announced at the State Council Information Office press conference that he would guide LPR downwards.Lowering the interest rates on existing home loans, reducing the down payment ratio for second home loans, increasing central government funds to support refinancing of affordable housing, and supporting the acquisition of land by real estate companies are all part of the new real estate finance policies.3. Stocks with negative net assets are fluctuating and strengthening, with many stocks such as Beijing Haixin Energy Technology, Guangdong Zhongnan Iron & Steel, Jilin Yatai, and Tonze New Energy Technology hitting the daily limit up. Commentary: On the news front, the China Securities Regulatory Commission solicited opinions on the "Guidelines for the Supervision of Listed Companies No. 10 - Market Value Management (Draft for Solicitation of Opinions)" on the 24th, which mentioned that companies that are main index constituents should establish and disclose their market value management system, and companies with long-term negative net assets should disclose their valuation enhancement plan. 4. The steel sector remains active. Cyclical concepts such as steel and non-ferrous metals continue to strengthen, with stocks like Guangdong Zhongnan Iron & Steel hitting the daily limit up. Commentary: Recently, Jin Xiandong, director of the Policy Research Office of the National Development and Reform Commission, stated that efforts will be focused on filling gaps and optimizing strengths, accelerating the construction of a modern industrial system supported by the real economy. In terms of optimization strengths, efforts will be made to promote accelerated joint restructuring in key industries such as steel. Local governments are also actively promoting restructuring and consolidation in the steel industry. Industry insiders also indicate that as the National Day holiday approaches, downstream restocking demand will be released, and it is expected that the social inventory of steel will continue to decrease. This article is reprinted from "Tencent Selected Stocks". Editor: Chen Xiaoyi.