A-share market review | Index fluctuates and rises, technology stocks rebound, institutions say the stock market will gradually stabilize.

Market fluctuation rises. As of the close, the Shanghai Composite Index rose by 0.87%, the Shenzhen Component Index rose by 1.53%, and the Growth Enterprise Index rose by 1.77%. In terms of the market, technology stocks saw a rebound. In terms of sectors, concepts related to optical modules, PCBs, and computing power hardware all surged. AI application concepts continued to be strong, with stocks like H&R Century Union Corporation hitting the limit up. Game stocks saw abnormal movements, with Giant Network Group hitting the limit up. The storage chip sector strengthened, with stocks like Beijing LeiKe Defense Technology hitting the limit up. Commercial aerospace concepts also rose again. On the downside, only a few concept sectors were in the red, with the previously strong aquatic products concept facing a correction, causing Cnfc Overseas Fisheries and Zoneco Group to hit limit down. Military industry and China Shipbuilding group stocks collectively declined. According to China Securities Journal, based on various market views, there are three main reasons for the sharp rise in technology stocks today: Firstly, AI narrative restructuring. The market believes that Alphabet Inc. Class C is replacing NVIDIA Corporation as the new leader in the AI market. Recently, Alphabet Inc. Class C has been rising continuously and hit a new historical high on Monday with a 6.31% increase. NVIDIA Corporation, on the other hand, has been in a period of adjustment. Institutional attitudes have also started to change. On one hand, Warren Buffet's Berkshire Hathaway disclosed its third-quarter 2025 holding report (13F) on November 15th. It was revealed that Berkshire Hathaway had taken a position in Alphabet Inc. Class C-A (GOOGL.US) in the third quarter, acquiring nearly 17.85 million shares, valued at about $4.3 billion by the end of the quarter. This was the stock that Berkshire Hathaway bought the most of in the third quarter and the only one that was newly added to its holdings. On the other hand, some institutions have been selling NVIDIA Corporation. Peter Thiel's hedge fund Thiel Macro recently disclosed its third-quarter 2025 holding report (13F), showing that by the end of September this year, the fund had sold all of its 537,700 shares of NVIDIA Corporation, which had originally accounted for about 40% of its total stock holdings. By the end of September, the fund's stock holdings had decreased from $212 million at the end of June to about $74 million. Additionally, well-known institutions such as Barclays, Bank of America Corp, UBS Group AG, Bank of Montreal, HSBC Holdings, and Citigroup have all reduced their holdings of NVIDIA Corporation to varying degrees in the third quarter. Secondly, the market is entering a new strategic window. Analysts believe that the seasonal characteristics of the market can be summarized as follows: from April to October is the "focus on reality" phase (focus on current pricing and fundamentals), and from November to March of the following year is the "focus on expectations" phase. In November, the market tends to focus on thematic games, and later on, the market begins to search for clues on economic momentum to position themselves for the spring rally. At present, technology stocks represented by AI have a high degree of visibility in terms of momentum. Lastly, various catalytic events. Changxin Storage announced on its official website that at the 22nd China International Semiconductor Expo (IC China) which opened on November 23rd, Changxin Storage showcased its latest products in DDR5 and LPDDR5X product lines for the first time under the theme "Double Core Resonance, Full Force Activation". Furthermore, Moore Threads is about to debut on the A-share market. The company announced on the evening of November 24th that based on data provided by the Shanghai Stock Exchange, the number of valid online subscription accounts for this offering was 4.8266 million, with a total of 46.217 billion shares subscribed for. The preliminary online subscription rate was 0.02423369%. Looking ahead, CITIC SEC believes that with more and more incremental funds being mainly conservative left-side funds, the A-share/H-share markets may follow a pattern similar to that of the US stock market with "rapid declines and slow rises". For investors who need to increase their equity allocations, releasing risks ahead of time can provide an opportunity for repositioning in A-shares/H-shares at the end of the year and positioning for 2026. East Money Information Securities believes that under the influence of calendar effects and institutional behaviors, the inflow of incremental funds has shifted from resonance in the third quarter to divergence, slowing down from the fourth quarter. As December approaches, the effect of capital inflows is expected to strengthen once again, and the spring rally may be able to start ahead of time. Hot Sectors: 1. CPO concept continues to rise The CPO concept is strong, with Advanced Fiber Resources, Wuxi Taclink Optoelectronics Technology, and Suzhou Everbright Photonics all hitting the daily limit up. 2. Consumer electronics sector leads the gains Consumer electronics are on the rise, with Suzhou K-Hiragawa Electronic Technology hitting the daily limit up, and Suzhou Chunqiu Electronic Technology and other stocks following suit. 3. AI applications continue to strengthen AI application concepts are strong, with Zhuhai Bojay Electronics hitting the daily limit up, and Beijing Haitian Ruisheng Science Technology Ltd. rising by over 14%. 4. Computing power sector shows strength The computing power sector is performing strongly, with Bingo Software hitting the daily limit up, and Hunan Airbluer Environmental Protection Technology rising by over 14%. 5. Storage chip sector leads the gains The storage chip sector is active, with Thinkon Semiconductor Jinzhou Corp. rising by over 14%. Institutional Perspectives: Guotai Haitong: China's stock market will gradually stabilize and launch a year-end offensive with plenty of room for growth. Guotai Haitong stated that the recent weakness in the Chinese stock market is due to the high motivation of some investors to secure profits and reduce positions as the year-end approaches. The cooling of the Fed rate cut expectations, increased volatility in the US stock market, and a lack of internal policies have contributed to increased trading fluctuations and weakened confidence. In addition, the slowdown in the approval of equity products has led to insufficient incremental supply in the market, negatively impacting the micro-structure of the stock market. In contrast to the current cautious consensus, Guotai Haitong's strategy firmly believes in the prospects for the Chinese market, with stock indices entering the "hitting zone". Opportunities always arise in times of panic, and the Chinese stock market will gradually stabilize and launch a year-end offensive with plenty of room for growth. Now is a good opportunity to increase positions. The volatility in the US stock market related to AI and Google hitting new highs seems more like a structural shift in AI rather than the end of a trend. China is also expected to enter a resonant period of policy, liquidity, and fundamentals from December to February, with the market adjusting its portfolio for offensive strategies after the correction. Guotai Haitong is positive on AI applications, Siasun Robot&Automation, domestic consumption, and Xinjiang infrastructure themes. China Securities Co., Ltd.: The main factors supporting a slow bull market remain unchanged, and the market is waiting for a turning point. China Securities Co., Ltd. believes that the current market is in a phase of "three overlaps": a mid-term consolidation period in the bull market, a critical period of economic validation, and a period of policy and economic fundamentals gap. Market fluctuations and fund realization at year-end will accentuate these characteristics further. Recent disturbances in the overseas environment, with the repeated uncertainty about the Fed's rate cut in December and the share price volatility of NVIDIA Corporation, have zapped market sentiment. In the long term, the main factors supporting a slow bull market remain unchanged; in the short term, the strategy is primarily focused on seizing opportunities and waiting for the outcomes of the Fed's interest rate meeting and the Central Economic Work Conference in mid-December. If the adjustment is sufficient during this period, it may be a good time to increase positions and absorb funds, while monitoring the 60-day and semi-annual support levels and market volume. Industries of focus include banking, petroleum and petrochemicals, steel, agriculture, forestry, animal husbandry, fisheries, lithium batteries, new materials, among others. Huatai: The current market valuation is close to a "reasonable" mid-range, and positions can be moderately increased if over-adjusted. Huatai stated that the recent debate over AI narratives, tightening liquidity, and disturbances such as those from GEO Group Inc. have intensified market volatility. The market correction is beginning to feel a sense of space, with potential strong support corresponding to late September levels. As global liquidity expectations improve, domestic funding pressures ease, and market sentiment further adjusts, the market trend environment may become healthier. Regarding positioning, the current market valuation is close to a "reasonable" mid-range, and positions can be moderately increased if over-adjusted. Focus on the medium-term main themes and prioritize safety margins in allocation. In a high volatility environment, the consideration of safety margins needs to be enhanced, primarily from three aspects: 1) safety margins in crowdedness, focusing on fermented food, leisure food, husbandry, communications services, securities, etc.; 2) safety margins in fundamentals, focusing on textile manufacturing, commercial vehicles, general equipment, rare metals, etc.; 3) safety margins in asset attributes, continuing to focus on cyclical dividends (coal, chemical industry, steel, etc.), and some potential dividend sectors (railways, highways, food processing, environmental protection, building materials, etc.). Additionally, for investors looking to navigate the highs and lows in the internal growth of technology, it is recommended to focus on sectors such as domestic computing power, innovative pharmaceuticals, and others. This article was originally published on "Tencent Self-selected Stocks" and edited by Li Fo for GMTEight.