On September 19, the three major A-share indices collectively declined. By the close, the Shanghai Composite Index fell 0.3%, the Shenzhen Component Index dropped 0.04%, and the ChiNext Index declined 0.16%. The combined turnover of the Shanghai, Shenzhen, and Beijing markets was 2,349.4 billion yuan for the day, shrinking by 817.2 billion yuan compared to the previous day. Over 3,400 stocks declined across the market. In terms of sectors, energy metals, photolithography machines, education, tourism and hotels, coal, and engineering machinery led gains, while humanoid robots, papermaking, innovative drugs, diversified finance, and liquid cooling servers led losses.

Among ETFs, major broad-based ETFs fluctuated and rose. The A500ETF Fund (512050), which has the highest turnover in its category, gained 0.09%. AI-related ETFs saw some pullbacks, with the Chip ETF (159995) falling 1.79% and the AI AIETF (515070) dropping 1.06%. The AI computing hardware industry chain, focusing on optical modules, PCBs, and servers, performed strongly. The 5G Communications ETF (515050) rose 1.27%, while the ChiNext AI ETF (159381) gained 0.43%.

At the current juncture, foreign institutions remain relatively optimistic about the outlook for A-shares. In its latest report, Goldman Sachs reiterated its "overweight" rating on A-shares and predicted an 8% upside over the next 12 months. Currently, MSCI China and the CSI 300 are trading at 12-month forward P/E ratios of 13.5x and 14.7x, respectively, still below the historical valuation ceiling of about 15-20x P/E seen in past bull markets. The report noted that a liquidity-driven bull market is unfolding in Chinese stocks, with "reflation" expectations and AI autonomous development being key catalysts. Looking ahead, Goldman Sachs believes there is significant potential for incremental funds in the Chinese stock market.

In terms of sector allocation, CICC believes that, in the short term, small-cap and growth stocks may outperform due to liquidity support from the Fed's rate cuts. However, if domestic policies do not reinforce this trend, more attention should be paid to structurally supported fundamentals and opportunities linked to U.S.-China correlations. Given the already optimistic sentiment, focus can be placed on: 1) U.S.-China correlation chains, such as computing power, robotics, and the Apple supply chain in technology, as well as tools, home improvement, furniture, and appliances related to the U.S. housing chain post-rate cuts, along with machinery and non-ferrous metals tied to investment; 2) sectors with improving fundamental景气, such as internet, tech hardware, consumer electronics, innovative drugs, non-ferrous metals, and non-bank financials.