Market-stabilization funds have driven a rebound in A-share sentiment, but earnings expectations and domestic demand remain weak. Morgan Stanley says the October correction improved the risk-reward profile of some high-quality, oversold stocks, and it continues to favor selective stock picking.
Technology stocks drove a sharp rise in A-shares on 4 November, but Nomura Orient International believes one day of higher turnover is insufficient to confirm a trend reversal. It recommends maintaining a highly defensive allocation in the short term and waiting for the market to consolidate on low turnover.
A-shares rose broadly on Wednesday afternoon, with turnover returning above 2 trillion yuan and the number of stocks hitting their first consecutive daily limit-up rising from 33 to 104. The column says the rebound’s continuation depends on trading volume, a recovery in heavyweight technology stocks and whether major indices can hold above their moving averages.
The buyback relending rate has been cut to 1%, and support tools have been extended to leading technology companies. HSBC believes policy is reinforcing the market’s floor, but outflows from margin financing and adjustments to tech-stock positions continue to affect the market.
On 4 November, the SSE STAR 50 Index rose nearly 10%, while turnover on the Shanghai and Shenzhen exchanges increased by 334.3 billion yuan from the previous trading day. Among stocks on the trading disclosure lists with institutional net purchases exceeding ten million yuan, Quectel and Piotech ranked near the top, while institutions were net sellers of some strong semiconductor stocks over the same period.
On 4 November, higher afternoon trading volumes in broad-market ETFs helped lift indices and technology stocks generally strengthened, but sentiment-driven stocks showed limited independent momentum. Cailian Press believes the style rotation still needs a transition period and is watching semiconductors, robotics and new energy.
In morning trading on 4 November, indices fluctuated weakly and trading volume edged down from the previous day, while short-term trading losses became more widespread. Funds returned to the humanoid robotics sector, semiconductors strengthened, and computing-power hardware was relatively weak.
CSI 300 revenue rose in the third quarter but earnings per share fell. JPMorgan expects full-year earnings growth to face downward revisions; policy provides downside support, while the AI infrastructure pullback creates new allocation opportunities.
The interest rate on relending for share buybacks and stake increases has fallen to 1%, as the support facility becomes permanent and covers leading technology companies. HSBC Qianhai believes the policy will help establish a market floor, but margin-financing outflows and technology portfolio adjustments continue to constrain stabilization.
Morgan Stanley estimates that at least about seventy percent of the 800 billion yuan market stabilization facility remains unused, but the outcome of the policy meeting, US stock performance and A-share valuations still influence when the market bottoms.
Broad-market ETFs are having less impact in supporting the market, while holdings in defensive sectors such as banks are loosening; the robotics theme faces a test of whether funds will return as capital rotation becomes more dispersed.
The market retreated on lower turnover. Among stocks with institutional net purchases or sales exceeding ten million yuan, more saw net selling than net buying. The report focuses on Zizhu High-tech’s aluminum-plastic film market share and Ciwen Media’s short-drama strategy as key business leads.
Trading turnover and broad-market ETF volume rose together early on Monday, but the A-share rally faded in the afternoon. Li Jiaqi’s livestream sold approximately 2 trillion Tokens in half an hour; China Merchants Securities is optimistic about the value of access points for consuming AI models.
After opening lower on the morning of 3 November, the indices fluctuated widely as turnover contracted. Cailian Press sees both support from large investors and weak organic buying, and says the strength of any subsequent capital return to AI applications and robotics warrants attention.
On 2 November, the index reversed last Friday’s losses on higher volume. AI applications led gains, while technology hardware came under pressure in the afternoon. Cailian Press says the index remains in a downtrend and that technology’s performance is key to a medium-term rebound. It also examines the business dynamics of short-drama platforms, mineral water and Token services.
Xiaolin Cailianshe says indices rebounded on higher volume in the morning of 2 November, as financials and AI applications strengthened. Although funds returned to tech hardware, the sector still showed insufficient momentum of its own. The report also tracked the certification and production progress of Zhishang Technology’s optical connectivity products.
The market rose before retreating on Friday, with the number of stocks hitting their daily lower limits rising to its highest level since 23 March. Large investors bought broad-market ETFs near the close, and policy news also emerged; Cailian Press expects a potential rebound on Monday.
As of 28 October, Morgan Stanley’s A-share sentiment indicator had risen 10 percentage points over the week, remaining below the 22% technical rebound signal level. Trading activity recovered, while margin financing balances and earnings estimate revisions weakened.
In the week ended 23 October, net subscriptions to ETFs tracking the CSI 300, ChiNext and STAR 50 indices rose sharply and were concentrated in those funds. Nomura Orient International believes sustained inflows can help ease selling pressure, but their current scale is insufficient to drive a sustained market reversal.
Indices climbed after a lower open, with PCB stocks leading the tech recovery and capital returning to robotics after divergent trading. Cailian Press is watching whether short-term sentiment can improve and how revenue is progressing at robotics supply-chain companies.
