A-share market review | Shanghai Composite Index fell 1.11% against the trend of smart driving. Funds are gathering in retail, food and beverage, and other consumer sectors.

Today, the market saw a significant adjustment, with the Shanghai Composite Index falling by over 1% and the ChiNext Index dropping by over 2%. Funds focused on retail, food and beverage, and other consumer sectors. The market saw a total turnover of 1.7 trillion RMB, with over 4300 stocks in both markets falling. Regarding the reasons for the adjustment, there are three main factors according to various market opinions: First, the market is avoiding risks related to "grey rhinos." The Bank of Japan is expected to hold a monetary policy meeting on December 18-19, with the market widely expecting a 25 basis point interest rate hike to 0.75%. Second, the continued decline of American stocks such as Oracle and Broadcom in recent days has once again sparked differences in the market's narrative logic regarding AI. Third, the commercial aerospace sector in A-shares plummeted, affecting the defense and military industry sector, suppressing market sentiment. In terms of market performance, retail concepts were active, with Baida Group Co., Ltd rising for 4 consecutive days, and Chengdu Hongqi Chain and Guangzhou Grandbuy rising for 2 consecutive days. The smart driving concept rose against the trend, with over ten stocks including Zhejiang Shibao and Shenzhen Soling Industrial hitting the daily limit up. The digital currency concept strengthened, with Beijing Cuiwei Tower and Aisino Co. Ltd hitting the daily limit up. The real estate sector rose in the afternoon, with Shenzhen Worldunion Group Incorporated hitting the daily limit up, along with China Fortune Land Development, Shenzhen SDG Service, Everbright Jiabao, and CASIN Real Estate Development Group rising. Leading the declines were precious metals, movie theaters, and Hainan-related sectors. Looking ahead, Orient believes that in the short term, the market's volatile structural characteristics will continue towards the end of the year, with sector rotation happening quickly. In terms of individual stocks, there were 1091 gainers, 4302 decliners, and 65 unchanged. There were 45 limit-up stocks and 39 limit-down stocks in both markets. By the close of trading, the Shanghai Composite Index fell by 1.11% to 3824.81 points with a turnover of 733.3 billion RMB; the Shenzhen Component Index fell by 1.51% to 12914.67 points with a turnover of 988.2 billion RMB. The ChiNext Index dropped by 2.10% to 3071.76 points. Capital Flows Today, major funds focused on the retail, passenger vehicle, and education sectors, with top net inflow stocks including Yonghui Superstores, BAIC BluePark New Energy Technology, and Offcn Education Technology. News Recap 1. Chongqing: Moderately advanced system to promote layout of hydrogen refueling stations and supporting facilities The "Chongqing Hydrogen Refueling Station Industry Development Plan (2025-2035)" was issued. It mentioned coordinating planning and advancing appropriately. According to the concept of "urban-rural coordination, regional coordination, key priorities, intensive and efficient, the systematic advancement of hydrogen refueling stations and supporting facilities layout is the objective. It focuses on utilizing industrial by-product hydrogen locally, actively expanding renewable energy hydrogen production, supporting the conversion and expansion of hydrogen refueling stations based on existing refueling stations and comprehensive energy supply stations, and constructing a hydrogen refueling station network system that suits the demand distribution, road station conditions, and urbanization spatial pattern. 2. Hongmeng Smart Travel initiates Level 3 conditional autonomous driving internal testing Hongmeng Smart Travel has recently launched Level 3 conditional autonomous driving internal testing in Shenzhen in collaboration with the Shenzhen Municipal Transportation Bureau and other relevant departments. Unlike conventional R&D testing, this test aims to verify the safety and product maturity brought to ordinary users by the Level 3 system through real roads and real user data, providing a practical basis for the implementation of the national Level 3 policy. According to insiders, this pilot initiative is jointly promoted by the Shenzhen Municipal Transportation Bureau, the Development and Reform Commission, and involves Huawei employees using self-purchased 2025 models of Wenjie M9 and Zunjie S800, covering all high-speed roads in Shenzhen totaling 1000 kilometers. Currently, over 20,000 kilometers of actual road validation has been completed. 3. National Development and Reform Commission: Vigorously enhance consumer willingness and deepen the implementation of the consumer revitalization special action The National Development and Reform Commission stated that expanding domestic demand is a key focus in strengthening the domestic circulation. Accelerating the cultivation of a complete domestic demand system is an important foundation for ensuring the smooth operation of the national economic cycle and enhancing the dominant position of the domestic circulation. With the economy already ranking second in the world in terms of size, China possesses the world's most potentially massive market. Major economies are led by domestic demand, and a strong domestic market is a major advantage of a major economy. 4. Shenzhen: Continuously promote a series of focused actions in the capital market, listing cultivation, merger and reorganization, venture capital and innovation investments On December 15, 2025, the Shenzhen Municipal Committee Financial Office held a meeting emphasizing the further promotion of financial service technological innovation and high-quality development in the promotion of a more globally influential industrial finance center positioning. Supporting the reform of the startup board, continuous promotion of capital market, listing cultivation, merger and reorganization, venture capital and innovation investments, and consolidating the vitality and competitiveness of the Shenzhen capital market. Market Outlook 1. EB SECURITIES: New round of policy deployment escorts, A-share year-end rally can be expected EB SECURITIES believes that with a new round of policy deployment, the A-share year-end rally can be expected: on the one hand, future domestic economic policies are expected to continue to strengthen, economic growth is expected to remain within a reasonable range, further solidifying the foundation for the prosperous development of the capital market; on the other hand, the release of policy dividends is expected to boost market confidence, further attracting various funds to actively enter the market; in addition, historically, A-share markets have performed well in the opening years of the "Thirteenth Five-Year Plan" and "Fourteenth Five-Year Plan, and this positive performance in opening years is expected to continue into 2026. In terms of industry allocation, focus on the TMT and advanced manufacturing sectors; if the market is volatile in the short term due to external factors, focus on defensive and consumer sectors. 2. Huaxi: Market risk appetite supported, focus on CKH HOLDINGS anti-internal consumption directions Huaxi believes that with recent overseas Federal Reserve interest rate meetings and domestic high-level meetings landing successively, the overall tone is in line with market expectations, and the risk appetite of the equity market is supported. After a month, the turnover rate for A-shares is marginally increasing, indicating a marginal recovery in trading activity, with expectations for multiple incremental funds to enter the market in the future, recommend combining next year's economic industrial policy directions and the layout of the "Fifteenth Five-Year Plan. Recommendations to focus on: 1) Growth directions supported by industrial policies, such as domestic substitution, Siasun Robot & Automation, aerospace, innovative medicine, energy storage, etc; 2) Cyclical directions benefiting from the "anti-internal consumption" policy, such as chemicals, energy metals, resources, etc; 3) The deepening consumer-driven policy or catalytic opportunities for the consumer sector. 3. Orient: Continue to focus on core technology categories with upward industry trends Orient believes that in the short term, the market's volatile structural characteristics will continue towards the end of the year, with sector rotation happening quickly, lacking core leading varieties; from a technical perspective, the Shanghai Composite Index continues to test support near 3850 points, but it is still part of the range-shaking structure we emphasize, continuing to focus on core technology categories with upward industry trends. This article was originally posted on "Tencent Stock Selection," GMTEight Editor: Liu Jiayin.