CITIC Securities: Middle East conflict may be the catalyst for a change in market structure.

According to the research report of CITIC Securities, the geopolitical impact of the Middle East conflict is significant, but its actual impact on Chinese assets is limited. However, the sudden change in risk appetite triggered by the conflict has had the most significant impact on sectors that are high in position, high in trading volume, and highly consensus-driven. Factors supporting the collective rise of small-cap stocks are showing cracks, making these sectors more prone to volatility in the future. The weakening of small-cap stocks and thematic rotation patterns also suggests a strengthening of the logic of returning to strong industries represented by AI. Another clue worth tracking is the return to policy, where sustained and universally low price signals could become a new catalyst, but patience is required. Overall, downplaying macro disturbances, returning to industrial trends, and remaining vigilant against small-cap volatility remain the core strategic thinking for the next phase.