Can A-shares get off to a good start? Institutional views are here.

Title context: Can A-shares get off to a good start? Institutional views are here. Text: As the National Day holiday draws to a close, China Securities Co.,Ltd., Sinolink, EB SECURITIES, Shanxi, Zhongtai, Caitong and other brokerages have released October strategy reports, offering assessments of the post-holiday market. According to institutional reviews, looking back at the Shanghai Composite Index's performance after the National Day holiday over the past 10 years, the probability of a positive start after the holiday is not small. Data shows that since 2016, the probability of a rise on the first day after the holiday reached 70%; the probability of a rise over the 3 days after the holiday reached 60%, and the probability of a rise over the 5 days after the holiday reached 60%. After the 2025 National Day holiday, the Shanghai Composite Index rose 1.32%, 0.17%, and 0.76% on the first, third, and fifth days, respectively. Overall, the market generally believes that the September adjustment has already released some valuation pressure. In October, supported jointly by marginal easing of overseas liquidity pressure, improvement in China-U.S. relations, and post-holiday capital return, market performance is likely to trend positive, but high interest rates and weak domestic demand mean rebound elasticity is limited. A structural pattern of "balanced with a slight tilt toward growth" and centered on earnings verification remains the main theme. Key point one: Third-quarter reports take over from valuation as the core of pricing For October trends, most brokerages gave relatively positive judgments. The EB SECURITIES strategy team believes that, based on past years, affected by post-holiday capital return, market performance in October is highly likely to recover. In addition, China-U.S. relations have also recently eased significantly, with frequent interactions between the two sides, which will also have a certain positive impact on market sentiment. However, it also emphasized that constraints remain. Under the Federal Reserve's hawkish stance, expectations for another rate hike within the year still exist, and the overseas high interest rate environment's valuation constraint on high-valuation growth sectors will be difficult to eliminate in the short term; domestic consumption is weak, and the repair of domestic demand still requires further policy efforts. Zhongtai overall holds a relatively optimistic and bullish view, and stated that factors such as the meeting between the Chinese and U.S. heads of state, the landing of Federal Reserve rate hikes, falling oil prices, and the opening of the third-quarter earnings window are driving a marginal improvement in market risk appetite. The company's research team analyzed from a technical perspective that the Shanghai Composite Index currently appears to be in a fairly standard box consolidation, with the upper side at 3995-4000 points and the lower side near 3850 points. The fluctuation does not change the nature of the market, and it advised grasping the rhythm well, maintaining composure, and not chasing rises or selling on declines. Sinolink also observed positive signals. The recent pullback showed a notable "shrinking volume" characteristic. This state of "being unable to fall further" often means that the release of bearish momentum is nearing its end. The company team judges that October, as a concentrated disclosure window for third-quarter reports, will make earnings realization the core anchor for market pricing, and the market style is expected to remain "balanced with a slight tilt toward growth." Key point two: On overseas variables, "strong dollar, high interest rates" remain a constraint China Securities Co.,Ltd. pointed out that the urgency for the Federal Reserve to continue raising rates in October has declined, but another rate hike within the year remains the baseline scenario, and the high interest rate environment still constrains valuation expansion. Entering the third-quarter earnings window, the market may further shift from being driven by themes and valuation toward third-quarter earnings realization. Sinolink interpreted that September U.S. economic data exceeding expectations effectively suppressed almost all assets outside the United States. The lagging rebound in Chinese hardware assets may not be solely due to positioning reasons, but rather a common global feature, corresponding to the logic of capital flowing back to the United States under the "strong dollar, high interest rates" environment, which is gradually unfolding. Sinolink proposed an analytical framework in which commodities are anchored to real interest rates, exports and overseas expansion are anchored to nominal interest rates, and AI is more like being anchored to (nominal interest rates minus the industry's own inflation). It also pointed to a turning point: if geopolitical risks ease, a short-term decline in energy prices may ease the upward pressure on nominal interest rates caused by inflation concerns, while improvement in physical supply constraints is expected to drive a recovery in real assets such as nonferrous metals; the stage in which China-U.S. trade friction has the strongest marginal impact on China's exports may be passing. Zhongtai stated that compared with the Philadelphia Semiconductor Index, A-share technology moves stronger when sentiment is optimistic and weaker when sentiment is pessimistic, showing a more emotional characteristic. It maintains a relatively optimistic attitude toward the performance of the domestic technology sector in October. Key point three: AI hardware has the highest consensus, while resources, innovative drugs, and non-bank financials bloom in multiple areas Overall, AI computing power hardware is the direction with the highest consensus. China Securities Co.,Ltd. recommends focusing on AI hardware directions such as optical modules, PCB/CCL, storage, and semiconductor equipment; Sinolink pointed out that computing power, as the direction with the clearest current industrial trend, should be watched for whether new AI narratives emerge and for capital expenditure guidance in the latest financial reports of internet giants in late October; Zhongtai focuses on the AI computing power and semiconductor industry chain, relatively low-level new technologies and new themes, and high-end manufacturing with excellent overseas performance. Resource products and energy received concentrated attention. China Securities Co.,Ltd. focused on industrial metals, coal, oil and gas, and basic chemicals supported by supply constraints and profit improvement. Sinolink provided two clear main lines: first, nonferrous metals (gold, copper, aluminum), as assets opposed to the dollar, are seeing a phased rebound gestating after the extreme rate hike expectations land and geopolitical conflicts ease, while in the long run current technology does not have the ability to accelerate again; second, this round of oil price fluctuations may instead release global restocking demand for energy, and the energy and chemicals chain represented by oil, oil shipping, and refining and chemicals will continue to benefit. In the direction of low-level improvement, China Securities Co.,Ltd. pointed out that innovative drugs/CXO have a relatively independent industrial trend, and securities and insurance have improved profit expectations while valuation and trading heat are at low levels, providing a certain basis for valuation repair; Shanxi emphasized that the valuation percentile of non-bank financials is in an extremely low historical range, forming a significant divergence from the high profit growth in interim reports. EB SECURITIES recommended three balanced directions: hard technology tracks, policy chains (consumption chain, real estate chain, infrastructure chain), and other sectors with bottom-up prosperity, such as agriculture, forestry, animal husbandry and fishery, pharmaceuticals, and non-bank financials. Key point four: Liquidity is stable and moderately loose, with a basis for repair Looking ahead to October, Caitong analyzed that liquidity is expected to return to stable and moderately loose conditions after the quarter-end, but the degree of easing for the full month still depends on the central bank's rollover operations and the speed of fiscal fund return. The increase in maturities of the central bank's medium- and long-term liquidity injection tools, the concentration of tax payments toward month-end, and the still considerable supply of government bonds will constitute some disturbance; on the other hand, the end of quarter-end assessments, post-holiday cash return, and the return of non-bank funds will help ease stratification among institutions, while the decline in certificate of deposit maturities will also help ease pressure on banks rolling over liabilities. Shanxi believes that the core contradiction in October shifts to the superposition of third-quarter earnings verification, "15th Five-Year Plan" expectation pricing, and cross-quarter liquidity arrangements. On the calendar, third-quarter reports enter a disclosure period, and earnings realization capability replaces valuation expansion as the core of pricing; the Fifth Plenary Session of the 20th Central Committee is held in October, and new quality productive forces directions related to the "15th Five-Year Plan" may see thematic catalysts. After the National Day holiday, capital returns, and October volume has a basis for repair. This article is reprinted from "Cailian Press," author: Zhao Xinrui; GMTEight editor: Xu Wenqiang.