A-share closing review | The Sci-Tech Innovation 50 rose more than 3%! Broad-based ETFs traded heavily, with the Shanghai 50 ETF reaching a record high in the past 10 years.

On January 21st, the A-share market rose and then fell back, with the Sci-Tech Innovation 50 Index closing up by 3.53%. The trading volume was 2.6 trillion, which was 177.1 billion less than the previous trading day. At the close, the Shanghai Composite Index rose by 0.08%, the Shenzhen Component Index rose by 0.70%, and the Growth Enterprise Index rose by 0.54%. Regarding the comprehensive rebound of technology stocks, according to China Securities Journal, in addition to storage chips, there are two new narratives of price increase in the technology sector: CPU price increase expectations and packaging and testing price increase. In addition, it is worth noting that the trading volume of broad-based ETFs continued to increase. The Shanghai 50 ETF (510050) had a trading volume of over 15 billion, reaching a peak since July 2015, with seven consecutive declines on the daily line. The Huatai Bairui SSE 300 ETF (510300), Jiashi SSE 300 ETF (159919), Huashan SSE 300 ETF (510330), and Yifangda SSE 300 ETF (510310) all had trading volumes exceeding 10 billion. On the market, technology stocks rebounded, with the semiconductor industry chain, computing power industry chain, and consumer electronics sectors all showing strong performance. The 600 billion Hygon Information Technology reached a new historical high, with over 10 chip stocks such as TongFu Microelectronics hitting the limit up. The non-ferrous metals and precious metals sectors were strong, with Hunan Silver seeing two consecutive limit ups, while lithium mining stocks rebounded, with Chengxin Lithium Group hitting the limit up. The oil and gas sector was active, with Geo-Jade Petroleum Corporation hitting the limit up, and the commercial aerospace sector rebounded in the afternoon, with Juli Sling Co., Ltd. and Vantone Neo Development Group hitting the limit up. On the downside, large financials, consumer goods, power, and coal were at the forefront of declines. Looking ahead, GF SEC stated that there is no risk in the index for the next month, and after the publication of annual report forecasts in late January, there is expected to be the strongest upward trend in the "calendar effect" in the market from the week before the Spring Festival to mid-March. Popular sectors 1. Chip stocks show strong performance: Chip stocks are strong, with computing power chips and storage leading the way. Infotmic Co., Ltd. saw two consecutive limit up days, while TongFu Microelectronics and other stocks also hit the limit up. 2. Precious metals sector strong: The precious metals sector is strong, with Hunan Silver hitting two consecutive limit ups, and Sichuan Gold hitting the limit up. 3. Lithium mining rebound: The lithium mining sector has rebounded, with Chengxin Lithium Group, Dazhong Mining, Canmax Technologies, Yongxing Special Materials Technology, and other stocks leading the way. Institutional viewpoints 1. Industrial: Spring market will continue to reach new highs. Industrial believes that in the latter half of January, as companies disclose their performance reports, the focus will be on adjusting the structure in the short term. With the market sentiment returning to rationality and the gradual release of annual reports from listed companies, performance will become an important factor driving the market. The market may undergo structural adjustments around the fundamentals, with hot sectors facing performance validations, and some underperforming sectors may see new inflows of funds. February is expected to bring back a core buying window, with renewed focus on themes. As January performance forecasts are completed, February will return to a period of fundamental quietude, with ample liquidity near the Spring Festival, making it the core dynamic period in the market until the National People's Congress, with small and medium-sized businesses, growth, and other high-resilience sectors expected to perform better. 2. Debon: Maintain a slow bull view, focus on policy orientation. Debon believes that a slow bull view should be maintained, with a focus on policy orientation. Looking ahead, with relatively high levels of liquidity in the short term, market hotspots are expected to remain active, but policy influences will continue to exist. In the short term, more volatile fluctuations are expected, and attention should be given to some technology sub-sectors that have relatively low market attention. In the medium to long term, under the guidance of the Thirteenth Five-Year Plan, policies support (PBOC "moderately loose" monetary policy) and industrial upgrading (anti-inventory, semiconductors, commercial aerospace, controllable nuclear fusion, etc.) will provide long-term support. The previous structural interest rate cuts by the PBOC and the proposal of reducing reserve requirements still have room for further easing signals to be released, and the market is expected to continue its slow bull trend. 3. Orient: "Index minor adjustments, hotspots rotating performance" pattern will continue until the Spring Festival Orient believes that the index's previous unilateral upward momentum has been stopped, and the correction is relatively mild, which is conducive to further market highs in the future. On the other hand, active funds are still reallocating and replacing stocks, trying to find more profitable directions. It is not ruled out that the sector will continue to rotate in the future, and the pattern of "index minor adjustments, hotspots rotating performance" will continue until the Spring Festival.