A-share midday review | The Shanghai Composite Index rose 0.49% in half a day, with resource stocks such as non-ferrous metals and oil and gas surging. The semiconductor sector strengthened again.

On January 28th, the A-shares market experienced mixed trading in the morning, with over 3500 stocks in the red. The half-day trading volume was 1.91 trillion, significantly higher than the previous trading day's volume of 39.3 billion. By midday, the Shanghai Composite Index was up 0.49%, the Shenzhen Component Index was up 0.09%, and the ChiNext Index was down 0.37%. Cinda believes that the liquidity environment is likely to be good before the Spring Festival, and the market may continue to be biased towards strength. In January, with fund sentiment diverging, there may be some fluctuations, but the spring rally is unlikely to peak, with downward risks under control and significant upside potential. February may present a more certain window of opportunity, with potential positives for incremental funds including increased allocation of risk assets, conversion of stocks and bonds in wealth management products, and a revival in public fund issuance. In terms of sector allocation, the supply-demand situation in industries such as non-ferrous metals is good, with prices continuing to rise and business outlook strong. On the market front, the resource sector continued to show strength, with the precious metals and gold concepts hitting limit up again. China National Gold Group Gold Jewellery had four consecutive limit up days, while Shanghai Yuyuan Tourist Mart and others had over 10 stocks hitting limit up. Oil and gas stocks rose again, with CNOOC Limited rising over 6% to hit a historic high. Additionally, sectors like coal, chemicals, and steel saw some performance improvements. The semiconductor industry chain strengthened again, led by storage chips, with multiple stocks hitting limit up. The computing power rental concept was also active, with Mcc Meili Cloud Computing Industry Investment hitting limit up. On the downside, sectors like photovoltaics, defense, and pharmaceuticals experienced declines. Looking ahead, Cinda believes that the liquidity environment is likely to be good before the Spring Festival, with the market possibly continuing to be biased towards strength. In February, there may be a more certain window of opportunity. Hot sectors: 1. The precious metals concept continued to show strength, with gold and other precious metals rising. China National Gold Group Gold Jewellery and others hit limit up. - Comment: Gold and silver prices are rising, with gold prices surpassing $5200 for the first time. Long-term bullish trends in gold are widely expected. 2. Oil and gas stocks were active again, with Sinopec Oilfield Service Corporation hitting limit up and CNOOC Limited hitting a historic high. - Comment: Winter storms in the US caused a surge in natural gas prices, with prices reaching a three-year high. 3. The semiconductor sector showed strength again, with storage chips and advanced packaging leading the way. - Comment: Semiconductor price hikes are spreading, with AI demand and domestic substitution supporting further price increases. 4. The computing power rental concept was strong, with multiple stocks hitting limit up. - Comment: Google announced a price adjustment for data transmission starting in 2026, with prices doubling in the North American region. Institutional opinions: 1. Huaxi: Maintain the trend of slow bull market Huaxi believes that the market's slow bull market trend remains unchanged, focusing on three main investment themes. In the past two weeks, under the "counter-cyclical adjustment" measures, the net outflow of major broad-based A-share ETFs and the high level of margin balance have slightly fallen, effectively controlling the trading pace. Market turnover remains relatively high, with strong support from small-cap growth stocks. The market bull market is expected to continue, entering a phase of accelerated sector rotation. Looking ahead, with the peak disclosure period for annual report forecasts, areas with high growth rates in performance will be the focus, suggesting a focus on the technology sector, rising prices, and high-growth areas. 2. Cinda: Market may continue to be biased towards strength before the Spring Festival Cinda believes that the liquidity environment is likely to be good before the Spring Festival, with the market possibly continuing to be biased towards strength. In January, there may be some fluctuations against the background of diverging fund sentiment, but the spring rally is unlikely to peak, with downward risks under control and significant upside potential. February may present a more certain window of opportunity, with potential positives for incremental funds including increased allocation of risk assets, conversion of stocks and bonds in wealth management products, and a revival in public fund issuance. In terms of sector allocation: the supply-demand situation in industries such as non-ferrous metals, new energy, and semiconductor chips is good, with prices continuing to rise and business outlook strong. The defense industry has many industrial catalysts, and it is likely to perform well in the mid-to-late stages of a bull market. In the financial sector, the resilience of non-banking stocks is expected to increase gradually. 3. Orient: Market's internal resilience is strong Orient believes that the market's internal resilience is strong, not solely dependent on heavyweight stocks. As listed companies disclose their annual report forecasts, performance impacts will become more significant. Currently, industries with bright spots and lower gains in this round include AI hardware, batteries, and pharmaceuticals. Since the beginning of the year, storage prices in various categories have exceeded expectations, with AI demand growth continuing to outpace capacity expansion. The entire domestic storage industry chain is expected to benefit from the shortage-driven price increase trend, making it a track worth investing in. This article was reprinted from "Tencent Stock Picks", edited by Wang Qiujia.