A-share market review: Shanghai Composite Index fell by 0.81%, high-priced stocks collectively fell, with Shanghai Morn Electric Equipment and several others limit down.

Today, the market fluctuated downwards, with the Internet e-commerce and AI sectors leading the gains. The total market turnover was about 1 trillion yuan for the day, slightly higher than the previous trading day, with over 4100 stocks falling in the two markets. In the peripheral markets, the Asia-Pacific markets also saw a sharp decline today, with the Japanese and South Korean stock markets experiencing significant drops. Bitcoin and gold also plummeted, while the Nasdaq 100 index futures fell by 1% at one point, and the Dow Jones index futures fell by 0.5%. According to Securities China, analysts believe that two major factors have led to the global asset rout. On one hand, it is related to the expectations of a rate cut by the Federal Reserve, with news today suggesting that there will be no rate cuts in the first half of next year. On the other hand, it is related to Japanese government bonds. Due to investors weighing the impact of Prime Minister Higashikoshi Naena's possible large-scale fiscal stimulus plan, the yield on Japan's 10-year government bonds climbed to over 1.75%, close to the highest level since 2008. This may have a huge impact on global liquidity. In terms of market performance, the AI application sector led the gains, with stocks like Alibaba's Thousand Questions, AI Corpora, and multimodal technologies. FS Development Investment Holdings rose by the daily limit, while stocks like Shunya International Martech, Inspur Software, and Fujian Rongji Software rallied. Positive news catalyzed the market, including Alibaba's official announcement of the "Thousand Questions" project and Warren Buffett's investment in Google's parent company, Alphabet. In the software sector, it is predicted that Google's highly anticipated Gemini 3.0 model will be released this week. Additionally, the Internet e-commerce sector strengthened, with Shanghai Lily&Beauty Cosmetics hitting the daily limit, and stocks like Lafang Jiahua and Proya Cosmetics following suit. Some consumer sectors experienced a rebound, while semiconductor and lithography concepts rose, and stocks like Shenzhen Dawei Innovation Technology hit the daily limit. Some mining stocks were active, with Beijing Teamsun Technology rising to the daily limit. In terms of declines, popular stocks like Zhongfu Straits and Strait Innovation Internet froze trading due to speculation crackdown, causing high-priced stocks to plummet, with Shanghai Morn Electric Equipment and Fujian Sanmu Group among those that dropped sharply. Coal and steel sectors led the market decline, with Shanxi Antai Group dropping nearly 10%. The lithium battery, lithium resources, and electrolyte sectors collectively adjusted, with Shida Shinghwa Advanced Material Group and Shandong Fengyuan Chemical hitting the daily limit. Stocks like Jiangsu HSC New Energy Materials dropped by more than 10%, and the chemical sector weakened along with the local stocks in Fujian, all of which fell. Previously surging defense stocks also followed the downward trend, along with the port shipping, retail, and gold sectors. Looking ahead, BOC International believes that the market may continue to fluctuate around 4000 points in the short term, with no clear directional breakthrough expected. The rate cut process by the Federal Reserve is currently in a "highly uncertain" state. They recommend focusing on AI storage in sectors where supply conflicts are most prominent and where previous gains are limited but still have value. In terms of individual stocks, there were 1278 gainers and 4106 losers in the two markets, with 67 stocks remaining unchanged. A total of 61 stocks hit the daily limit, while 37 stocks fell to the daily limit. At the close, the Shanghai Composite Index fell by 0.81% to 3939.81 points, with a turnover of 7910 billion yuan; the Shenzhen Component Index fell by 0.92% to 13080.49 points, with a turnover of 11325 billion yuan. Capital Trends Today, major funds focused on acquiring stocks in the communication equipment, IT services, and software development sectors, with top net inflow stocks including Eoptolink Technology Inc., NAURA Technology Group, and Hunan Kaimeite Gases. Top News Recap 1. Japanese Ministry of Foreign Affairs Officials Leave Chinese Ministry of Foreign Affairs The director of the Japanese Ministry of Foreign Affairs' Asian and Oceanic Affairs Bureau, Kanae Masaaki, began his visit to China yesterday (the 17th). According to Japanese media reports, during his visit to China, he will discuss Japanese Prime Minister Higashi's comments on Taiwan with the Chinese side. Today, Liu Jinsong, the director of the Asian department of the Ministry of Foreign Affairs, met with him. Around 2 pm, Kanae Masaaki and his entourage left the Chinese Ministry of Foreign Affairs. Faced with media questions, he did not make any statements. 2. China National Chemical Engineering and the Physical Power Industry Association: Guiding the Lithium Battery Industry to "Anti-Temperature Increase" The "Research Seminar on the Cost of Lithium Iron Phosphate Material Industry" was held in Beijing today, where Tang Yan, deputy secretary general of China National Chemical Engineering and the Physical Power Industry Association, stated that the lithium battery industry is currently facing the most severe "intrusion" challenge in the history of its development. The lithium iron phosphate material industry has become the most competitive and profit-pressured link in the lithium battery industry chain. In response, Tang Yan proposed three industry collaborative actions. By establishing a capacity warning mechanism, promoting long-term strategic cooperation between material companies and downstream leaders, guiding the orderly release of capacity, and avoiding the problem of demand growth with no increase in profits. 3. Federal Reserve Board Member Waller Supports Rate Cut in December, Vice Chairman Emphasizes Slow Policy Progress On Monday, Waller, a popular candidate for the next Federal Reserve chairman and current board member, stated that he supports another rate cut at the December meeting of the Federal Reserve because he is concerned about the labor market and significant slowdown in hiring. Meanwhile, Vice Chairman Jefferson stated that he believes the downside risks faced by employment have increased, but he also reiterated the need for caution and slow policy progress as interest rates approach neutral levels. He mentioned that the risk balance in the economy has shifted in recent months, with increased downside risks for employment and a slightly decreased risk for inflation. Market Outlook 1. BOC International: Market may continue to oscillate around 4000 points in the short term, with no clear directional breakthrough expected BOC International believes that looking ahead, the market may continue to oscillate around 4000 points in the short term, with no clear directional breakthrough expected. The expectations for the previous valuation repairs of risk assets are relatively full, and with the gradual emergence of investment pressure in the fourth quarter, the volatility of risk assets may increase. In addition, the overseas central banks, especially the Federal Reserve, are currently in a "highly uncertain" state regarding the rate cut process. Whether or not there will be a rate cut in December will depend heavily on the upcoming inflation and employment data. The speed of sector rotation in the short term may accelerate: the consumer sector, which has been stagnant in the past, may see some recovery as inflation data warms up towards the end of the year and the beginning of the year. The market style may also see a period of balance. 2. Huaxi: A-shares still dominated by stock supply-demand issues, focusing on energy storage and domestic substitution directions Huaxi believes that since November, the retracement of Chinese and American technology stocks has been mainly due to overseas liquidity tightening and concerns about the AI bubble, with a focus on changes in US economic data and December rate cut expectations. From the perspective of fund flows, A-shares are still dominated by stock supply-demand issues, with margin funds and southbound funds transactions showing a trend of "high and low cuts." In addition, the landing of performance benchmark expectations for mutual funds is helping to curb issues like fund "style drift, track betting, grouping, and chasing short-term rankings"; the extreme clustering of institutions may also weaken. Currently, A-shares are in a period of performance vacuum, with weakened fundamental guidance, and expectations of the "next year's policy trends and economic trends" are strengthening through trading, making it conducive to a market environment of "small and medium market values + thematic investments." 3. Guotou Securities: True style shift will only occur when the bull market transitions clearly to the fundamental bull market As for when the A-share technology style will return, it is still under observation at present, with historical indications pointing towards early next year. From the current logical signal level, the current A-share technology market depends on global AI industry trends and reflections of American stock technology, so it is necessary to pay attention to important overseas signals, mainly in two aspects: firstly, whether the Federal Reserve's rate cut in December will be implemented as planned. Secondly, the third-quarter financial reports of overseas technology stocks, including giants like Nvidia, Alibaba, and Baidu, will provide a positive response to the "AI bubble theory" in American stocks. Currently, the high-cut low is still a style re-balancing (falling from a high position, rising from a low position), and we still maintain that a true style shift will only occur when the bull market clearly transitions to the fundamental bull market, at which point investment in marine companies + low-position pro-cyclical (including globally priced resources, chemicals, industrial metals, household appliances, etc.) may become the "last gamble" in investments for the year. This article is from "Tencent Self-selected Stocks", edited by Liu Jiayin.