A-share midday review | Shanghai index rose 0.21% after rising and falling, household appliance stocks collectively rose, Hang Wei Ji dropped over 11%

On January 16, the three major indexes rose in the morning session but fell back. By the end of trading, the Shanghai Composite Index rose by 0.21%, the Shenzhen Component Index rose by 0.06%, and the ChiNext Index rose by 0.01%. On the market, the household appliance sector collectively rose, while the oil and gas, Little Red Book concept, and precious metal sectors led the way in terms of index gains. On the downside, chip stocks underwent adjustments, with SMIC falling by over 11%. Of note, cross-border ETFs showed signs of recovery, with the S&P Consumer ETF (159529) rising by over 9%, trading at a premium of over 40%, with transactions exceeding 1.5 billion yuan. Similarly, the Jiashi Germany ETF (159561), Asia Pacific Select ETF (159687), CSOP Saudi Arabia ETF (159329), and Fortune S&P Oil & Gas ETF (513350) all rose by over 4%. In terms of main capital flows, funds favored the household appliance components and communication equipment industries, while funds fled from the internet ecommerce and furniture sectors. Institutional Views: Looking ahead, Sinolink believes that the further implementation of the "RRR cut" in the short term is an important signal for the restoration of market risk appetite. The rotation of incremental funds will drive the market to another "counterattack". BOC International: The market's stabilization depends on the resolution of external risks Currently, market views on the recovery of fundamentals remain divided, similar to January 2024. The difference lies in the fact that although market interest rates have risen slightly, the interest rate trend remains low, with overall funding conditions in a tight balance. In addition, the uncertainty of Trump's tariff policy during his term is one of the factors that the current market is more concerned about. Combining previous experiences of market stabilization, we believe that the market's stabilization in the short term depends on the resolution of external risks. Trump's upcoming term inauguration can be an important observation point for the switch in expectations for external and domestic policies: if he intensifies tariffs, there may be greater expectations for internal demand policy. In addition, in the longer term, sustained fiscal policy action is a key factor in domestic demand and market expectations this year, requiring close attention to Chinese New Year consumption and credit release in January and February. CICC: The Federal Reserve may cut interest rates twice in the first half of this year CICC stated that the month-over-month core CPI in the United States in December slowed down from 0.3% to 0.2%, and the year-over-year rate from 3.3% to 3.2%, both below market expectations. The Federal Reserve's main concern, non-rent service inflation, has declined, while core goods and rent inflation remain moderate without signs of acceleration. Despite strong non-farm employment figures last Friday, inflation continues to slow down, indicating that the economy has not shown signs of overheating. This is good news. US bond yields have fallen and US stocks have rebounded. CICC maintains its previous judgment that the US is likely to achieve a "blond economic" state, and the market may be overestimating the upside risks of US inflation. CICC believes there is a high probability that the Fed will skip a rate cut in January, but there is still a possibility of a rate cut in March. CICC maintains its view that the Fed may cut interest rates twice in the first half of this year. Orient: Market is expected to show a pattern of fluctuation and rise in the medium term Orient pointed out that overall, the market sentiment was slightly weak towards the end of the year, but in the medium term, with a loose monetary and fiscal environment this year, the macro asset allocation is expected to become more favorable for stocks. Stock market returns are gradually stabilizing and predictable, with long-term funds potentially becoming an incremental source of funds for the stock market. The market is expected to show a pattern of fluctuation and rise. Sinolink: Expecting a "spring frenzy", leaning towards small and medium-sized tech growth Sinolink believes that the resonance between the "end demand side + supply side" in China will continue to support the start of the "spring market". On the end demand side, the expansion of the manufacturing PMI in December and the faster-than-expected acceleration of the non-manufacturing PMI have continued to verify the trend of the recovery of China's fundamentals; on the supply side, the remaining market liquidity continues to rebound, providing a basis for valuation expansion for the future market rally. The increase in market volatility at the beginning of the year may be due to the higher demand for funds in that period, resulting in a short-term increase in money supply. Therefore, we believe that the further implementation of the "RRR cut" in the short term is an important signal for the restoration of market risk appetite. The rotation of incremental funds will drive the market to another "counterattack". The end of the "spring market" in the future still emphasizes the attention to the "decline" of domestic fundamentals and the rise of overseas risks. Popular Sectors: 1. Little Red Book concept continues to surge The Little Red Book concept continues to surge, with Inmyshow Digital Technology, Foshan Yowant Technology, and Inly Media Co., Ltd. hitting three consecutive limit ups. Hangzhou Onechance Tech Corp. rose by over 10%, while Sunwave Communications, FS Development Investment Holdings, and Merit Interactive all opened high. Comment: Zheshang pointed out that the start of a new round of international development for the Little Red Book is positive for the advertising and ecommerce operation sectors. 2. Household appliance stocks rise collectively Household appliance stocks rose collectively, with Marssenger Kitchenware rising by over 10%, Hisense Visual Technology, and Shanghai Hajime Advanced Material Technology rising by over 5%, and Zhe Jiang Kangsheng, Create Technology & Science, Guangdong Deerma Technology, Shenzhen Crastal Technology, Jiangsu Chunlan Refrigerating Equipment Stock, and Guangdong Vanward New Electric following suit. Comment: In terms of news, the Ministry of Commerce and four other departments released a notice regarding the "2025 Old-for-New Program for Household Appliances." 3. SiaThe concept of Sun Robot & Automation is becoming increasingly active.Siasun Robot & Automation concept is becoming active again, Zhejiang XCC Group has had 6 consecutive days of gains, reaching a historical high. In addition, Shenzhen King Explorer Science And Technology Corporation has had 6 consecutive days of gains, Jiangsu Hengli Hydraulic has hit the limit up, iSoftStone Information Technology has risen by more than 10%, Shanghai Hajime Advanced Material Technology, DINGS, Miracle Automation Engineering and others have followed the trend. Comment: On the news front, Beijing is planning to hold a main event in August this year with humanoid Siasun Robot & Automation competition as the focus, as well as peripheral events focusing on human-machine interaction. This article is reprinted from "Tencent stocks"; Editor: Wang Qiujia.