A-share market closing review | Three major positive news boost! The index rebounded on shrinking volume, the Shanghai index returned to 3900 points, and the ChiNext Index rose more than 2%

On October 15th, A-shares rebounded on shrinking volume, with the Shanghai Composite Index returning to 3900 points. Over 4300 stocks in the market were in the green, with a total turnover of 2.07 trillion yuan for the day, down 503.4 billion yuan from the previous trading day. By the close, the Shanghai Composite Index was up 1.22%, the Shenzhen Component Index was up 1.73%, and the ChiNext Index was up 2.36%. It is worth noting that market analysts believe that A-shares have received three major positive news: 1. Senior officials have stated that they will intensify efforts to implement countercyclical adjustments, making full use of policy resources to break through bottlenecks and points of resistance. Efforts will be made to consistently expand domestic demand, strengthen the domestic circulation, and continuously create new growth points for expanding domestic demand. Various measures will be taken to create a top-notch industrial ecosystem, comprehensively regulate industries, address irrational competition, and focus on building an innovative ecosystem. 2. Today, the central bank conducted 600 billion yuan in reverse repurchase operations. According to Caixin, industry insiders believe that given the recent increase in external market volatility, the central bank is expected to pay more attention to maintaining market liquidity and stabilizing market expectations. Industry insiders predict that the central bank may implement a new round of reserve ratio cuts in the fourth quarter. 3. Federal Reserve Chairman Powell stated that the balance sheet reduction may come to an end in the next few months, as liquidity conditions are tightening. Powell did not deliberately suppress market expectations in his speech, indicating that the Federal Reserve may cut interest rates again at the meeting on October 28-29. On the market front, hot sectors were active, with Siasun Robot & Automation sector surging in the afternoon, Zhejiang Sanhua Intelligent Controls among others hitting the daily limit up; pharmaceutical stocks rebounded collectively, with innovative drugs leading the way, and Zhejiang Anglikang Pharmaceutical among others hitting the daily limit up; the consumer goods sector was strong, with beauty, retail, and food and beverage leading the way, Jiangxi Guoguang Commercial Chains hitting limit up for three consecutive days; the data center power concept rallied in the afternoon, with Beijing Sifang Automation among others hitting the daily limit up; domestic software and software development concepts surged, with Beijing Join-cheer Software hitting the daily limit up; the automotive industry chain was strong, with Haima Automobile hitting the daily limit. On the downside, ports and shipping, non-ferrous metals, and oil and gas sectors were in the red. Looking ahead, Orient believes that overseas friction is intensifying, but overall risks are manageable. Due to short-term disturbances, the market's overall risk bias is returning to equilibrium, and the barbell strategy is becoming more effective. In terms of offense, attention should be given to relatively low-level sectors such as pharmaceuticals, software, new energy, and the internet for rotation and rebound opportunities. Hot sectors: 1. Innovative drug sector rebounds Pharmaceutical stocks rebounded collectively, with innovative drugs leading the way, and Zhejiang Anglikang Pharmaceutical, Chimin Health Management, Jiangsu Lianhuan Pharmaceutical, and Zhejiang Yatai Pharmaceutical among others hitting the daily limit up. Comments: There are three catalytic factors on the news front. First, the European Society for Medical Oncology (ESMO) will convene from October 17th to 21st, and the latest breakthrough data will be gradually released during the conference. Second, the BD trade is entering the traditional peak season. Third, the performance expectations brought by innovative drugs are bright. According to Securities Times, institutions generally believe that the next investment logic of the innovative drug sector is expected to shift from emotional repair to fundamental drive. 2. Consumer goods sector strong The consumer goods sector was strong, with beauty, retail, and food and beverages leading the way, Jiangxi Guoguang Commercial Chains hitting the limit up for three consecutive days, Zhejiang Truelove Vogue and others hitting the daily limit up. Comments: On the news front, a meeting of economic experts and entrepreneurs was held recently, emphasizing the need to intensify efforts to implement countercyclical adjustments, make full use of policy resources, and break through bottlenecks and points of resistance through reform. Efforts will be made to expand domestic demand, strengthen the domestic circulation, and continuously create new growth points for expanding domestic demand. Huatai points out that in the medium to long term, China's service consumption expansion has great development potential, and the opportunity for bottom-up configuration of consumer leaders is highlighted. 3. Domestic software concept strong The domestic software and software development concepts were strong, with Beijing Join-cheer Software, Fujian Rongji Software, Koal Software among others hitting the daily limit up, and Pinming Technology, Gstarsoft Co., Ltd. following suit. Comments: On the news front, Xin Kailes subsidiary, Qiyunfang, released two domestically-produced electronic engineering EDA design software with complete independent intellectual property rights at the 2025 Bay Area Semiconductor Industry Ecological Expo (Wanxin Exhibition). Tianfeng believes that against the backdrop of increasing global technological competition and supply chain security requirements, the self-controllability of key basic software has become a necessary answer. With its accumulation in technology, policy, market, and ecology, domestically-produced software has the ability to replace foreign alternatives and is expected to accelerate the process of nationalization of China National Software & Service. Institutional views: 1. Orient: Market's overall risk bias is returning to balance, focus on low-level sectors such as pharmaceuticals Orient's investment consultant Wang Xiaohua believes that overseas friction is intensifying, but overall risks are manageable. Pressure on the U.S. economy may continue to compel the Federal Reserve to ease. If the Federal Reserve exits balance sheet reduction, global demand is expected to improve. Structurally, due to short-term disturbances, the market's overall risk bias is returning to balance, and the barbell strategy is becoming more effective. In terms of offense, attention should be given to relatively low-level sectors such as pharmaceuticals, software, new energy, and the internet for rotation and rebound opportunities. Defensively, focus on long-term dividend potential in sectors such as utilities, large financials, infrastructure, and power. 2. Zheshang: External shocks do not change the strategic bullish view, market may see a change in style Zheshang believes that after nearly two weeks of interpretation, there are clear signs of the rise of large financials and cyclicals, and a weakening of the technology style. Combined with external influences, it is not ruled out that the market may "change gears" at its current position and shift the focus to large financials, cyclical sectors, and dividend-oriented sectors. In terms of allocation, based on the judgment of "sticking to the strategic bullish view despite external shocks and the possibility of a change in market style," it is recommended to: adhere to a systematic "slow" bull mentality, and if external shocks bring opportunities for "picking up passengers," continue to increase positions on dips. In terms of industry allocation, it is recommended that absolute return funds focus on sectors like large financials, real estate, mid-cap infrastructure, and dividends; relative return styles should closely monitor the trend line of the innovation and entrepreneurship index and important moving averages as a basis for operations, while also managing "high cuts and low additions" within sectors and controlling portfolio flexibility. 3. Huatai: Market may undergo a volatile adjustment to digest pressure Huatai believes that despite lingering concerns in the market, there is no escaping the fact that uncertainties remain regarding the progress of tariffs, and the development of the situation needs to be closely monitored. With the repeated fluctuations in news, there is still a possibility of volatility in the market. Looking at the Shanghai Composite Index, it has been fluctuating at the high end of the box range since the end of August, hitting resistance at 3900 points before falling back, indicating strong resistance above. Currently, the battle between bulls and bears may continue, and the market may undergo a volatile adjustment to digest pressure.