A-share midday report| Not afraid of negative news attacks, Shanghai and Shenzhen indexes rebound strongly, Hainan Free Trade Zone, electric power equipment concepts explode

On November 5, the A-share market showed differentiation. By the noon close, the Shanghai Composite Index rose by 0.05%, the Shenzhen Component Index fell by 0.15%, and the ChiNext Index rose by 0.17%. Analysts believe that the collective interpretation of three major bullish factors on the market is an important reason for the relatively strong performance of the A-share market: First, in October 2025, China's warehousing index was 50.6%, up 1 percentage point from the previous month, indicating stable economic vitality with an upward trend. Second, according to the announcement by the central bank on November 4, medium-term market liquidity continues to be released. Third, hot concept sectors remain active, with the Hainan and Fujian sectors surging in early trading. A market with hotspots can retain popularity. In terms of the market, the tourism and hotel sectors have risen, with Caissa Tosun Development hitting the limit up, and companies like Chengdu New Tianfu Culture Tourism Development, Cloud Live Technology Group, and Yunnan Tourism following suit. The ice and snow industry sector has seen a surge, with Dalian Sunasia Tourism Holding hitting a new high and companies like Fujian Snowman Group hitting the limit up. The coal mining and processing sector is active, with Shanxi Antai Group hitting the limit up, and companies like Baotailong New Materials and Shaanxi Heimao Coking following suit. The banking sector saw a rebound in mid-trading, with the Industrial and Commercial Bank of China rising nearly 1% to hit a historical high. The A-share total market value exceeded 2.2 trillion, with Shanghai Pudong Development Bank, Bank Of Ningbo, Bank Of Nanjing, and Shanghai Rural Commercial Bank leading in terms of gains. The sectors that saw declines included energy metals and storage chips. Looking ahead, EB SECURITIES believes that the market correction is in line with historical patterns, and the short-term may enter a period of wide-ranging fluctuations. Popular sectors 1. Hainan Free Trade Zone concept rises The Hainan Free Trade Zone concept has risen, with Hainan Development Holdings Nanhai experiencing a surge for 6 consecutive days. Companies like Geo-Jade Petroleum Corporation, Haima Automobile, and Hainan Strait Shipping hit the limit up, while companies like Honz Pharmaceutical, Hainan Shennong Seed Industry Technology, Hainan Airport Infrastructure, and Luoniushan Co., Ltd. saw significant gains. Comment: On December 18 of this year, the full-island closure and operation of the Hainan Free Trade Port will officially begin. Guosen strategy believes that the closure operation will be a watershed for the investment logic of Hainan, marking the first wave of themes represented by duty-free islands tending to stabilize, while a second wave of "industrial restructuring" focusing on high-end manufacturing, modern services, and international trade is set to take off. 2. Coal mining and processing sector remains active The coal mining and processing sector remains active, with Shanxi Antai Group hitting the limit up, and companies like Baotailong New Materials, Shaanxi Heimao Coking, Liaoning Energy Industry, Yunnan Coal & Energy, and Zhengzhou Coal Industry & Electric Power following suit. Comment: Changjiang believes that in terms of demand, the unexpectedly cold weather in the north and the gradual cooling in the south have led to a spike in daily consumption by power plants, with available inventory days lower than in previous years, indicating a significant need for restocking; on the supply side, stricter safety supervision and policies to curb overproduction limit the release of supply. The coal sector led gains, driven by a triple resonance of fundamentals, policies, and valuations. 3. Rising trend in the electrical grid and energy storage concepts The electrical grid and energy storage concepts continue to rise, with Jiangsu Shemar Electric hitting two consecutive limits up, and companies like Hainan Jinpan Smart Technology and TBEA Co., Ltd. rising by over 6%, setting new highs. Previously, more than ten stocks like Shanghai HYP-ARCH Architectural Design Consultant, Smartgen, Ceepower Co., Ltd, and Baoding Tianwei Baobian Electric hit the limit up. Comment: Soochow points out that the estimated installed capacity of energy storage in the United States in 2026 will be revised up to 76GWh, a year-on-year increase of nearly 44%, with data center-related contributions of 34GWh. It is also expected that by 2030, energy storage in the United States will exceed 350GWh, with an annual compound growth of 40-60%, corresponding to a demand for nearly 500GWh of batteries. 4. Tourism and hotel sector rises The tourism and hotel sector has seen gains, with Caissa Tosun Development hitting the limit up, and companies like Chengdu New Tianfu Culture Tourism Development, Cloud Live Technology Group, and Yunnan Tourism following suit. Comment: On the news front, the holiday schedule for 2026 has been released, with the Spring Festival holiday of 2026 set to last from February 15 to February 23, spanning nine days. Following the announcement, the number of flight bookings for the 2026 Spring Festival has increased by 63% compared to the same period in 2025. For the tourism sector, Guosheng Securities points out the importance of short-term focus on third-quarter performance certainty and sub-sectors with elasticity during the Spring Festival peak season. Institutional views 1. EB SECURITIES: Market correction aligns with historical patterns, short-term may enter a period of wide-ranging fluctuations EB SECURITIES believes that historically, market corrections during bull markets are common. The bullish phase of the market typically experiences fluctuations in the 60-80 trading days after the start of an upward trend. Furthermore, based on history, after forming a temporary high point during the bullish phase, a correction usually occurs when the upward trend narrows to 6%-7%, followed by a new uptrend. The low point of the correction after a temporary high point is usually seen around the 90th trading day of the bullish phase. The current timing of the market correction to some extent aligns with historical patterns. The market's overall direction may still be in a bull market, but in the short term, it may enter a period of wide-ranging fluctuations. 2. East Money Information: Shanghai Composite Index continues to fluctuate around 4000 points, focusing on themes like artificial intelligence and biotechnology East Money Information suggests that the Shanghai Composite Index has been fluctuating around 4000 points recently. Investors may feel some anxiety when the index surpasses the 4000-point mark in the bull market process. However, compared to 2007 and 2015, the current A-share market valuation is more resilient, and in a globally liquid environment, market logic has strengthened. The bull market can be divided into three stages: the first stage is liquidity improvement, the second stage is increasing risk appetite, and the third stage is fundamental improvement. Currently, the market is in the second stage of the bull market, driven by the increasing risk appetite. If the fundamentals continue to improve and spread, there may be opportunities for the third stage. In terms of investment direction, Chen Guo suggests focusing on three major themes: artificial intelligence, biotechnology, and commodities. 3. Zheshang: Double Creation Index currently in a weak fluctuation pattern, focus on relatively low-level sectors like steel and consumption Zheshang believes that after the Shanghai Composite Index broke through 4000 points last week, it saw some retracement, with different broad-based indices showing clear differentiation. Looking ahead, if the Shanghai Composite Index stays above the trend line and does not fall below the previous platform peak of 3936 points, the upward trend can be maintained. The Double Creation Index is currently in a weak fluctuation pattern, and its stability depends on the performance of weighted indices and core component stocks. For the brokerage sector, which has seen lagging gains and has significant room for recovery, its short-term direction is still to be observed. In terms of allocation, based on the assessment that "the market trend is not clear, and two signals still need to be observed," Zheshang suggests maintaining the current position tactically and not making adjustments.