A-share market midday report | Shanghai Stock Exchange fell 0.16% at midday, with strong performance in the silicon industry sector. Hainan Free Trade Zone concept once again rose.

On November 7, the A-share market collectively adjusted in the morning session, with the three major indexes slightly down. Over 2800 stocks drifted lower, with a half-day turnover of 1.3 trillion, a decrease of 71.06 billion compared to the previous day. By the midday close, the Shanghai Composite Index fell by 0.16%, the Shenzhen Component Index fell by 0.16%, and the ChiNext Index fell by 0.37%. On the market, hot spots quickly rotated, with the chemical industry sector continuing to strengthen. Shares of Jiangsu Chengxing Phosph-Chemicals, Henan Qingshuiyuan Technology, and 10 other concept stocks hit the limit up. The Hainan sector was active again, with Haima Automobile hitting the limit up for the fifth consecutive day. The organic silicon sector collectively surged, with shares of Shandong Dongyue Silicone Material, Hoshine Silicon Industry, and others hitting the limit up. Lithium battery concept stocks quickly rose, with Tonze New Energy Technology and Shida Shinghwa Advanced Material Group hitting the limit up. On the downside, several stocks in the Siasun Robot & Automation sector fell, with Jiangsu LiXing General Steel Ball and Zhejiang Rongtai Electric Material experiencing significant declines. In terms of sectors, the chemical industry, Hainan, and battery sectors led the gains, while software development and gaming sectors led the declines. Looking ahead, Central China believes that with the high valuation of the technology growth sector, market volatility is expected to increase further. Hot Sectors: 1. Hainan sector continues to rise: The Hainan free trade zone concept continues to rise, with Haima Automobile hitting the limit up for the fifth day in a row, and other stocks like Honz Pharmaceutical, Xinlong Holding, Caissa Tosun Development, Hainan Strait Shipping, and Luoniushan Co., Ltd. leading the gains. 2. Strong performance of organic silicon concepts: The organic silicon concept showed strength, with Hoshine Silicon Industry, Shandong Dongyue Silicone Material hitting the limit up, and Chengdu Guibao Science & Technology, Zhejiang Xinan Chemical Industrial Group, Ningbo Runhe High-Tech Materials following suit. Institutional Views: 1. Huajin Securities: The slow bull trend and the technology mainline remain unchanged, suggesting low allocation to communication, electronics, etc. Huajin Securities believes that factors leading to the recent A-share correction are gradually diminishing. From a market indicators perspective, although sentiment indicators have not fully adjusted, industry rotations have mostly been completed. From a fundamental perspective, risk appetite may increase, while liquidity remains loose, and the short-term correction may end, continuing the slow bull trend. In the short term, it is recommended to buy low in industries such as communication (computing power), electronics (semiconductors, consumer electronics), media (games, AI applications), machinery equipment (Siasun Robot & Automation), computers (AI applications, autonomous driving), non-ferrous metals, chemical industry, etc., as well as industries benefitting from the "14th Five-Year Plan" and improved third-quarter financial performance, such as new energy, medicine, consumption (food, retail trade), defense industry (commercial aerospace), and so on. 2. Dongguan Securities: Market style more balanced than in the third quarter, clear trend in technology growth Dongguan Securities believes that although the domestic economy weakened in the third quarter, considering the relatively smaller difficulty in achieving the full-year GDP growth target, with fiscal stability policies already in place, in the fourth quarter, the central government may focus on implementing existing policies and focus more on the medium to long term. Looking ahead, the market style of the A-share market is expected to be more balanced than in the third quarter, with recommendations to focus on industries with clear trends in new energy represented by technology growth and high-end manufacturing. It also suggests balanced allocation, as policies like "anti-internal circulation" take effect and domestic demand recovers, some cyclical sectors may show marginal improvements. 3. Central China: Market to continue structural oscillation, consider increasing allocation to technology sector. Central China believes that the impact of the Federal Reserve's interest rate cut, which was already within market expectations, may have been already digested. As we enter November, with the completion of the disclosure of third-quarter reports of listed companies and the high valuation of the technology growth sector, market volatility is expected to increase further. Overall, the market is expected to continue a pattern of structural oscillation. In terms of allocation, it is recommended to have low-volatility assets as the basic allocation, and if the technology sector sees a correction and improves in terms of cost-effectiveness, consider increasing allocation accordingly. Additionally, focus on securities firms, insurance, banks, pharmaceuticals, and other sectors.