A-share midday review | ChiNext rose 0.69% in the first half of the day, pharmaceutical stocks continued to be strong, and high-popularity stocks adjusted at high levels.

On October 16th, the A-share market opened in the red and fluctuated. The turnover in the morning session was 1.21 trillion yuan, down by 57.8 billion yuan from the previous trading day. Over 4000 stocks were trading lower. By the midday close, the Shanghai Composite Index rose by 0.1%, the Shenzhen Component Index rose by 0.15%, and the ChiNext Index rose by 0.69%. Industrial believes that entering October, with the disclosure of third quarter reports and the approaching Fourth Plenum, the focus should remain on domestic factors, with economic trends and industry trends being the core considerations. The current focus is on defense industry, domestically produced computing power industry chain, benefiting from the "14th Five-Year Plan", as well as innovative drugs, North American computing power chain, gaming, and batteries, among other third quarter optimistic sectors. In terms of market performance, funds continue to switch between sectors rapidly. Dividend plays continue to be active, with insurance and banking leading the way. Pharmaceutical stocks remain strong, with innovative drugs and traditional Chinese medicine leading the gains. The semiconductor sector is performing well, particularly in storage chips, with Tangshan Sunfar Silicon Industries seeing a double-digit increase. Gold and silver concepts are on the rise, with Baiyin Nonferrous Group seeing a steady increase. Additionally, shipping, gold, defense, and real estate sectors took turns in the spotlight. On the decline, high-profile stocks adjusted, with controlled nuclear fusion taking a hit. Looking ahead, Industrial believes that the focus should remain on domestic factors, with economic trends and industry trends being core considerations. Popular Sectors: 1. Pharmaceutical Stocks Remain Strong Pharmaceutical stocks continue to perform well, with innovative drugs and traditional Chinese medicine leading the gains, including stocks like Guizhou Bailing Group Pharmaceutical, Luoxin Pharmaceuticals Group Stock, and Zhejiang Yatai Pharmaceutical. 2. Rising Trend in Storage Chip Concepts Stocks in the storage chip concept sector are seeing a rising trend, with Tangshan Sunfar Silicon Industries showing significant gains. Companies like Shenzhen Techwinsemi Technology and Biwin Storage Technology are also showing positive momentum. Institutional Viewpoints: 1. Industrial: Focus on domestic factors, short-term positioning in domestic demand sectors Industrial believes that domestic factors should be the primary focus, with a short-term focus on domestic demand sectors like agriculture, small metals, precious metals, beverages, dairy products, and securities insurance. The defense industry, domestically produced computing power industry chain, and sectors benefiting from the "14th Five-Year Plan" are also important considerations, as well as innovative drugs, North American computing power chain, gaming, and batteries. 2. Shenwan Hongyuan Group: Market effectiveness depends on technological leadership Shenwan Hongyuan Group believes that the overall market will be led by technology. Despite short-term adjustments, the outlook for the fourth quarter remains positive. The spring of 2026 may be a temporary high point, but it's likely not the annual high point or the peak of the current bull market. The bull market still has room to grow, and as time goes on, conditions for a full bull market will become more favorable. In the short term, potential risks from US-China trade friction could impact risk appetite, with a focus on banks, rare earths, defense, and agriculture. 3. Orient: It's likely that the stock index will continue to rebound Orient believes that after external negative factors, the market is recovering, and there is a high probability of a continued rebound in stock indices. The Shanghai Composite Index is poised to steadily rise towards 4000 points, with large technology companies continuing to be the main focus for investment. Pharmaceutical and consumer sectors, which have experienced significant adjustments, currently offer good value and are worth considering for conservative investors. Another important external variable to consider is the trend of the Renminbi, which has risen above 7.10 yuan against the US dollar for the first time since November last year, potentially indicating an approaching window for Renminbi appreciation and benefiting equity assets. This article was originally published by "Tencent Self-selected Stocks" and edited by Wang Qiujia for GMTEight.