A-share market review | A-shares fell in the afternoon, with major financial sectors such as insurance and brokerage declining, while the semiconductor sector saw a pullback.

November 12th, A-shares underwent a volatile adjustment, at the same time, the renminbi dropped by 400 points, the Hang Seng Index suddenly fell below the 20,000 point mark in the afternoon, and the Asia-Pacific market also experienced a downturn. At the close, the Shanghai Composite Index fell by 1.39%, the Shenzhen Component Index fell by 0.65%, and the ChiNext Index fell by 0.07%, rising more than 2% in the morning session and registering a total turnover of over 2.5 trillion yuan for the day, surpassing 2 trillion for the sixth consecutive day. Nearly 3800 stocks were in the red. Market observers believe that the sudden afternoon plunge in the indices may be attributed to two main factors: 1. The renminbi exchange rate continues to be under pressure from the strengthening US dollar. As of the time of writing, the onshore renminbi against the US dollar was 7.2304, falling by over 400 basis points during the day; the offshore renminbi against the US dollar was 7.2473, falling by nearly 200 basis points during the day. 2. Funds inside the market that had previously bottom-fished through stock ETFs are gradually taking profits. According to data from the Galaxy Securities Fund Research Center, on November 11th, stock ETF funds saw a net outflow of over 25 billion yuan, marking the highest net outflow in a single day since February 22, 2005. The cumulative net outflow of funds over the past 7 trading days in November also exceeded one hundred billion yuan. On the market, large financial sectors such as insurance and securities declined, the semiconductor sector saw a correction, and sectors such as military technology and Huawei concepts were among the top decliners. In addition, high-priced stocks continued to retreat, with several stocks such as China Zhonghua Geotechnical Engineering Group, Hainan Shuangcheng Pharmaceuticals, Landai Technology Group Corp., China Fortune Land Development, and Hua Ying Technology hitting the limit down for the second consecutive day. On the rise, the medical industry chain moved against the trend, with medical commerce and traditional Chinese medicine leading the way. Stocks in the lithium and other new energy sectors were strong, while the automotive industry chain including autonomous driving and vehicles showed renewed activity. In terms of main funds, funds favored industries such as medical commerce, railways and highways, and general retail, while funds fled from the semiconductor, securities, software development, and battery industries. Institutional Views Looking ahead, EB SECURITIES believes that with continuous policy boosts and more to come, and with high popularity in the market, the market is expected to continue its upward trend in volatility. CICC: A shares return to the prosperous track, return to the track layout A CICC research report points out that A-shares return to the prosperous track, returning to the track layout. Some of our country's industrial fundamentals have undergone years of adjustment, and capacity is expected to be cleared under policy guidance and industry trends, with more industries expected to gradually improve in the future. Combining the improvement in investor risk appetite, the investment concepts of the past 3 years may face adjustment, and runway research and prosperous investments are expected to gradually return. EB SECURITIES: Market is expected to continue its upward trend in volatility EB SECURITIES believes that the positive news of 10 trillion yuan bond conversion drove A-shares higher on Monday. Structurally, the news of "TSMC suspension of supply" stimulated a surge in technology stocks led by chip semiconductors, driving market sentiment. Looking ahead, with continuous policy boosts and more to come, and with high popularity in the market, the market is expected to continue its upward trend in volatility. Hot Sectors 1. Medical industry chain rises The medical industry chain saw a significant increase, with medical commerce, traditional Chinese medicine, medical aesthetics, and medical equipment leading the way. Stocks like Sichuan Hezong Medicine Easy-To-Buy Pharmaceutical, Wanbangde Pharmaceutical Holding Group, Xi'An International Medical Investment, Thalys Medical Technology Group Corporation, and others hit the limit up. Review: On the news front, the State Medical Insurance Administration Office and the Financial Office of the Ministry of Finance issued a notice on the prepayment of medical insurance funds. CITIC International's research report pointed out that after experiencing policy stimuli such as interest rate cuts, the pharmaceutical industry will return to rational investment, and the market will observe whether the government will provide more financial support to the pharmaceutical industry. In the short term, it is advisable to focus on stocks with strong certainty of performance in 2024 and sufficient funds. 2. Automotive stocks show renewed activity The concept of the automotive industry as a whole was active again, with stocks of Jiangling Motors Corporation, Dongfeng Automobile, SAIC Motor Corporation hitting the limit up, while Xiamen King Long Motor Group, Yutong Bus Co.,Ltd., and Zotye Automobile followed suit. Review: According to data from the China Association of Automobile Manufacturers, automobile sales in October reached 3.053 million units, a year-on-year increase of 7%, with new energy vehicle production and sales both increasing by nearly 50%. Guoyuan believes that the profitability of the automotive industry has entered a phase of stable growth and high-quality development, and recommends focusing on the industry's end-of-year market and the specific implementation of the "scrappage for new" policy before the year-end. 3. Lithium mining sector rebounds The lithium mining sector rebounded, with stocks like Willing New Energy rising for two consecutive days, and Yongxing Special Materials Technology, Canmax Technologies, Sinomine Resource Group, Ganfeng Lithium Group, Tianqi Lithium Corporation, Qinghai Salt Lake Industry climbing. Review: On the news front, the main contract for lithium carbonate futures on the Guangxi Futures Exchange rose by over 4% for the second consecutive day. CITIC Futures believes that this is due to both demand and supply-side factors.Currently, strong performance exceeded expectations, while on the other hand, some overseas mining companies have revised down future production guidance in their third quarter reports, fueling positive sentiment.This article is reprinted from "Tencent Select Stocks", GMTEight editor: Huang Xiaodong.