A-share market closing review: Shanghai Composite Index holds above 4100 points, ChiNext Index drops by 1.79%! When will the banking sector support the market and when will the consolidation end?

On January 20, the three major indexes collectively closed lower, with the Shanghai Composite Index holding at 4100 points and a trading volume of 2.78 trillion, an increase of 69.4 billion from the previous trading day. By the close, the Shanghai Composite Index fell 0.01%, the Shenzhen Component Index fell 0.97%, and the ChiNext Index fell 1.79%. Huatai believes that considering the recent market trends, the major broad-based indexes are not likely to see many surprises in the short term, with 4190 on the Shanghai Composite Index possibly being a short-term high point. Before February, the market is likely to experience a technical correction. If stock indexes see another rapid increase, especially driven by emotions, caution should be taken to prevent the Spring Festival market from being overdrawn or ending prematurely. It is advisable to avoid irrational speculative targets and focus on the "fundamental performance" direction. In terms of market performance, there has been a change in market style, with hot spots rotating rapidly. Specifically, the banking sector supported the market, with Bank Of Chengdu leading the gains. Real estate stocks showed strength against the trend, with Shanghai Chengtou Holding and others hitting the limit up. Chemical stocks surged, with Hongbaoli Group Corporation and others hitting the limit up. The consumer goods sector remained active, with Hefei Department Store Group hitting the limit up. The precious metals sector rose, with Hunan Silver hitting the limit up. Additionally, sectors such as AI applications, semiconductors, and coal also performed well during the trading session. On the downside, the commercial aerospace sector continued to decline, with military, solar energy, and consumer electronics leading the losses. Popular Sectors: 1. Precious metals concept rose The precious metals concept rose in the afternoon, with Hunan Silver, Zhaojin International Gold hitting the limit up, and Sichuan Gold, Zhongjin Gold Corp., Ltd., Chifeng Jilong Gold Mining, Beijing Xiaocheng Technology Stock following suit. Comment: On the news front, spot gold rose to $4700 per ounce, up 0.67% intra-day, hitting a new all-time high. Yesterday, COMEX silver futures rose by 6.49%, also hitting a new high. Guosen Haitong believes that against the backdrop of geopolitical turmoil, gold has strong resilience and hedging properties, and recommends over allocation to gold. 2. Real estate sector rose Real estate stocks rose, with Shanghai Chengtou Holding, Hefei Urban Construction Development hitting the limit up, and Poly Developments and Holdings Group, China Merchants Shekou Industrial Zone Holdings, Shenzhen Overseas Chinese Town, Hangzhou Binjiang Real Estate Group following suit. Comment: According to data from the National Bureau of Statistics, in December 2025, the sales prices of new commercial residential buildings in first-tier cities fell by 0.3% month-on-month, narrowing by 0.1 percentage points from the previous month. BOC International pointed out that there is expected to be appropriate policy adjustments in the first quarter. In terms of real estate targets, real estate companies with liquidity security, a significant focus on high-level cities, and outstanding product strength may have alpha attributes. 3. AI application direction rebounded AI application directions like cultural media rebounded, with Zhewen Interactive Group, Beijing Quanshi World Online Network Information, Guangdong Yowant Technology Group, Jiayun Technology Inc. hitting the limit up. Comment: CITIC SEC believes that there are still many catalysts for AI application in the future, and the trend of accelerated AI application landing is expected to continue. On the hardware side, AI is gradually penetrating daily life in various forms, including large terminals such as cars, Siasun Robot & Automation, glasses, smart homes, as well as wearables such as smart glasses, rings, headphones, and smart toys. On the software side, upgrades in model reasoning capabilities will drive the accelerated landing of enterprise-level agentic AI. Institutional Views: 1. Guosen: The continuation of the Spring market is pending, and temporary fluctuations may present good opportunities for positioning Guosen believes that the continuation of the Spring market is pending, and temporary fluctuations may present good opportunities for positioning. The technology theme remains unchanged, with short-term balanced allocation. Looking at the historical preference for styles during the Spring market period, there is no stable preference for growth or value styles. For industry allocations during this round of the Spring market, driven by the AI wave, technology growth remains the main theme of this bull market, and attention should be focused on the subdivided sectors of AI application. In addition, opportunities for value sector allocation, such as non-banking, resources, liquor, and real estate, may also be worth considering. 2. Shenwan Hongyuan Group: The short-term market may enter a consolidation phase Shenwan Hongyuan Group Securities believes that the upward trends in the commercial aerospace and AI application industries are objective, but the market interpretation of strong momentum and excessive trading characteristics is also objective. Short-term excessive trading will be suppressed, and the market may enter a consolidation phase. A-shares have a foundation for medium-term upward movement, so "steady progress" can balance short-term fluctuations and long-term goals. As the short-term market momentum effect subsides, there may be rotation in other directions, and the overall money-making effect may shrink. Patience is needed to wait for further economic, policy, and industrial catalysis to ease fundamental, valuation, and microstructural contradictions. 3. Huatai: Market starts to focus on "fundamental performance" direction Huatai believes that considering the recent market trends, the market outlook for the near future has been largely determined. Looking at the indexes, the main broad-based indexes are not likely to see many surprises in the short term, with 4190 on the Shanghai Composite Index possibly being a short-term high point. Before February, the market is likely to experience a technical correction. If stock indexes see another rapid increase, especially driven by emotions, caution should be taken to prevent the Spring Festival market from being overdrawn or ending prematurely. In terms of operations, positions should not be too light, but portfolio structure needs adjustment, and it is advisable to avoid irrational speculative targets and start focusing on the "fundamental performance" direction. Currently, industries with expectations of significant profit improvement include non-ferrous metals, power equipment, and new energy.