A-share closing review | Three major indices closed higher, big news in the chip sector! Leading company hits a new high of 200 billion.

Today, the market hit bottom and rebounded, with all three major indexes rising collectively by the close. Funds continued to rotate, with the chip, computing power, and other sectors rebounding, and the gold concept continued to be strong. The market had a total turnover of 2.8 trillion yuan, a decrease of more than 350 billion yuan from the previous trading day, with over 3,400 stocks in both markets declining. According to China Securities, the style of the A-share market has been changing rapidly recently. Funds are flowing back and forth between technology, cyclical, and dividend sectors, as well as between large and small cap stocks. This change may leave some investors at a loss in the short term, leading them to choose to stay on the sidelines. Analysts believe that there are still three major variables in the market recently: 1. In the last three weeks before the holiday, how the deleveraging behavior and degree will affect the bullish sentiment. 2. After the A50 index experienced 9 consecutive declines, the adjustment of heavyweight stocks in the market is relatively sufficient. Whether the subsequent style will make it difficult to continue the theme speculation and affect the market's profit effect remains to be seen. 3. After entering the period of earnings disclosure and pre-disclosure, in the last few trading days of January, some earnings bombshells may gradually be revealed. On the market side, the chip sector saw a strong rebound, with the leading company Hua Hong Semiconductor reaching a historic high market value of 200 billion yuan. In terms of news, Micron Technology announced that the groundbreaking ceremony for the advanced wafer production plant within its existing NAND flash memory manufacturing facility in Singapore has officially begun. It plans to invest approximately $24 billion USD in the next ten years, with production expected to begin in the second half of 2028. In other hot areas, the commercial aerospace concept warmed up, with multiple stocks such as AECC Aviation Power and Aecc Aero Science and Technology hitting the daily limit up. The precious metals sector continued to be strong, with multiple stocks such as Hunan Gold Corporation and Shengda Resources reaching historic highs. The computing power sector was strong, with stocks like Suzhou TFC Optical Communication rising. On the downside, cyclical resource stocks like coal and steel adjusted, while pharmaceutical, biotechnology, and consumer goods sectors led the decline. Looking ahead, Orient believes that the recent proactive cooling of the market has changed the pace of market operations, but not the overall market trend, which bodes well for maintaining a rational and slow bull market pattern. "Technology sector + resources" is the main investment route before the Spring Festival. In terms of individual stocks, there were 1,928 gainers and 3,454 decliners in the two markets, with 91 unchanged. There were a total of 59 limit-up stocks and 13 limit-down stocks. By the close, the Shanghai Composite Index rose by 0.18% to 4,139.90 points, with a turnover of 1.2894 trillion yuan; the Shenzhen Component Index rose by 0.09% to 14,329.91 points, with a turnover of 1.6056 trillion yuan. The ChiNext Index rose by 0.71% to 3,342.60 points. Funds' movements Today, main funds focused on communication equipment, semiconductors, and banking sectors for heavy buying, with top net inflows into stocks such as Zhongji Innolight, Eoptolink Technology Inc., and Industrial Fulian. Headlines review 1. China to introduce measures to address the impact of artificial intelligence on employment The Ministry of Human Resources and Social Security announced that China will implement measures to stabilize employment, expand capacity and improve quality, introduce targeted job support measures for key industries, and issue documents to address the impact of artificial intelligence on employment. It also aims to strengthen job support for key groups, issue employment documents for college graduates and young people, publish opinions on coordinating urban and rural employment systems, and establish a mechanism for regular prevention of poverty through employment assistance. 2. The US and Japan plan to invest in synthetic diamond production As part of a $550 billion investment plan in the US, Japan and the United States are considering investing in the construction of a synthetic diamond production factory, according to sources. 3. National Bureau of Statistics: Profit growth of national industrial enterprises above designated size is 0.6% in 2025 Data from the National Bureau of Statistics shows that in 2025, the total profits of industrial enterprises above designated size in China reached 7398.2 billion yuan, a year-on-year increase of 0.6%. Among industrial enterprises above designated size in 2025, state-controlled enterprises achieved a total profit of 2,561 billion yuan, a decrease of 3.9% from the previous year; shareholding enterprises achieved a total profit of 554.08 billion yuan, a decrease of 0.1%; foreign, Hong Kong, Macao, and Taiwan-invested enterprises achieved a total profit of 1,747.4 billion yuan, an increase of 4.2%; private enterprises achieved a total profit of 2.28106 trillion yuan, unchanged from the previous year. Market Predictions 1. Zhongtai: Short-term market differentiation pattern still has continuity Zhongtai believes that the short-term market differentiation pattern is likely to continue, while the medium-term may gradually converge. However, in the medium term, as the disclosure of annual and quarterly reports of listed companies begins after the Spring Festival, market pricing logic is expected to shift from risk appetite and valuation expansion to a game of performance realization and profit growth. With the verification window of performance opening, valuation anchors are expected to return to the level of corporate earnings and actual growth, gradually converging the structural over differentiation driven by risk preference. By the end of January to before the Spring Festival, the hot spots in the technology sector may spread from main themes to subdivided fields, focusing on high-elasticity directions with fund aggregation effects. 2. Sinolink: Asset allocation trends towards physical assets and Chinese assets Sinolink believes that A-shares demonstrated market resilience last week amidst overseas risks and regulatory signals. Recommendations include: reassessment of physical assets as an allocation attribute, with global investments contributing to physical consumption in copper, aluminum, tin, gold, lithium, crude oil, and oil transportation; confirmation of China's equipment export chain with global comparative advantages and confirmation of the cyclical bottom - power grid equipment, energy storage, lithium batteries, photovoltaics, engineering machinery, commercial vehicles, as well as domestic manufacturing industry reversals - printing and dyeing, coal chemical, pesticides, polyurethane, titanium dioxide, and wafer manufacturing, etc.; capital inflows + easing balance sheet pressure + the trend of inbound personnel leading to a rise in consumption - aviation, duty-free, hotels, food and beverages; non-financial benefits from capital market expansion and the bottoming out of long-term asset-side returns. 3. Orient: Market operation big pattern unchanged Orient believes that the polarization pattern indicates an increase in market uncertainties recently. On the one hand, external variables continue to occur, and the narrative logic of the capital market industry is significantly weakened; on the other hand, related hot sectors have quickly retreated from strong to extremely strong, exerting a significant impact on risk appetite. In conclusion, the recent proactive cooling of the market has changed the pace of market operations, but not the overall market trend, which is conducive to maintaining a rational and slow bull market pattern. "Technology sector + resources" is the main investment route before the Spring Festival. This article was reprinted from "Tencent Stock Selection". Editor: Liu Jiayin.