A-share Market Opening Brief | All three major indices open higher, with pharmaceuticals and computing power hardware leading gains

Opening Data On October 16, the Shanghai Composite Index opened 0.44% higher at 3,723.80 points, the Shenzhen Component Index opened 1.26% higher at 11,965.57 points, and the ChiNext Index opened 1.75% higher at 2,831.89 points. The STAR 50 opened 1.65% higher at 1,381.93 points. As of 9:33, a total of 5,083 stocks in the Shanghai and Shenzhen markets rose, 410 fell, and 84 were flat. Top gainers: medical services, biological products, chemical pharmaceuticals, tumor vaccine concept, CRO concept, AI healthcare concept, etc.; optical communication concept, CPO concept, memory chip concept and other computing power hardware directions rebounded in sync. Top decliners: shipping ports, coal mining, insurance, etc.; the baijiu sector opened higher and then edged lower. Market Conditions As of 9:33, the three major indices opened collectively higher and then edged lower, still all in the green. The Shanghai Composite Index stood at 3,721.17 points, up 0.37%; the Shenzhen Component Index stood at 11,933.15 points, up 0.98%; the ChiNext Index stood at 2,815.74 points, up 1.17%; and the STAR 50 stood at 1,374.73 points, up 1.12%. In terms of structure, the two main lines of pharmaceuticals and computing power hardware led the gains. Medical services rose 3.47%, biological products rose 2.73%, and chemical pharmaceuticals rose 2.52%; the tumor vaccine concept rose 5.95%, the AI healthcare concept rose 4.25%, and the CRO concept rose 4.11%. PharmaResources hit the daily limit, JenKem Technology rose more than 13%, and Shanghai OPM Biosciences rose more than 6%. In the computing power hardware direction, communications equipment rose 2.06% and semiconductors rose 1.44%; Advanced Fiber Resources rose more than 6%, Zhongji Innolight and Eoptolink Technology Inc. rose more than 2%, and Shanghai Fudan Microelectronics Group rose more than 7%. The baijiu and securities sectors, which had strengthened against the trend on the previous trading day, pulled back, while shipping ports, coal mining, insurance and other sectors edged lower. Across the market, 18 stocks hit the daily limit, 3 hit the daily limit down, and advancers accounted for 91% of the market. Turnover in the two markets was 137.008 billion yuan. Overnight News at a Glance Overseas stock markets and inflation data: On October 15, Asia-Pacific stock markets plunged, with South Korea's KOSPI triggering a circuit breaker and closing down 7.57%, while Japan's Nikkei 225 closed down 4.90%. On the same day, U.S. stocks opened lower and closed higher, with the Dow up 1.08%, the S&P 500 up 0.33%, and the Nasdaq up 0.08%. U.S. September PPI rose 6.3% year-on-year. Policy and liquidity: On October 15, the G20 Finance Ministers and Central Bank Governors Meeting was held in Bangkok. Finance Minister Lan Fo'an said China will implement a more proactive fiscal policy in a precise and effective manner, and People's Bank of China Governor Pan Gongsheng said China will continue to implement a moderately loose monetary policy well. On the same day, the central bank conducted 700 billion yuan of 6-month outright reverse repurchase operations. Industrial policy and company buybacks: The "15th Five-Year Plan for the Development of the New Battery Industry" issued by the Ministry of Industry and Information Technology and six other departments on September 28 drew market attention again on October 15. That day, the solid-state battery sector moved in the afternoon, and the plan proposed that all-solid-state batteries initially achieve large-scale application by 2030. On the evening of October 15, Eoptolink Technology Inc., Avary Holding, Biwin Storage Technology, Suzhou TFC Optical Communication and several other companies disclosed buyback or share increase plans, with the largest single buyback amounting to up to 1 billion yuan. Trend Assessment The three major indices opened collectively higher, with the Shanghai Composite Index opening up 0.44% and the ChiNext Index opening up 1.75%, returning above 2,800 points, before edging lower after the open. The main lines of pharmaceuticals and computing power hardware led the gains, while the baijiu and securities sectors that had supported the market on the previous trading day pulled back. Overnight, U.S. stocks opened lower and closed higher despite inflation data beating expectations, with all three major indices closing higher. Japanese and South Korean stock markets, which plunged on October 15, opened higher and fluctuated. On the previous trading day, broad-based ETFs saw increased volume late in the session, and several companies disclosed buyback and share increase plans, easing external sentiment at the margin. Yang Chao, chief strategist at China Galaxy Securities, believes that external shocks are more of an emotional disturbance rather than a reversal of fundamental trends, but growth sectors saw crowded trading earlier and still have valuation digestion needs. Industry participants believe that the short-term market may remain in a volatile bottoming phase, and in terms of allocation, it is advisable to select among technology sectors sub-sector leaders with third-quarter earnings delivery and solid orders.