Following the divergent performance of the previous week, the markets experienced synchronized volatile gains this week. However, the ChiNext Index, which is dominated by growth stocks, showed greater resilience, hitting a new high for the year. The Shanghai Composite Index saw a slight rebound after stabilizing from its decline but failed to break through key resistance levels in one move. In reality, the Shanghai Composite Index had already surpassed its 2021 high, while the ChiNext Index still has room to reach its peak from that time. Coupled with the ongoing catalysis from industrial trends, the overall performance of the ChiNext board remains relatively stronger.
Approaching the National Day holiday, trading volume in both markets did not significantly increase, and market sentiment cooled somewhat. Only some large-cap growth stocks performed well, driving the indices higher. For the week, most major broad-based indices advanced, with only the Beijing Stock Exchange 50 Index and the CSI 2000 Index posting slight declines. The STAR 50 Index and the ChiNext Index led the gains. In terms of market style, growth and cyclical styles rose, while all other styles declined, with consumption and stable styles leading the losses. At the sector level, most Shenwan primary industries fell, with gains concentrated in a few sectors.
Looking at global equity markets, most major markets rose, with Asia-Pacific markets still outperforming European and American markets. In the US market, all three major indices adjusted slightly, ranking at the bottom globally. The Nasdaq led the declines relatively, as comments from the Fed Chair about high US stock valuations sparked market concerns. In European markets, the three major indices were mixed: the UK's FTSE 100 and Germany's DAX posted slight gains, while France's CAC 40 declined. In Asia-Pacific markets, the ChiNext Index and the Shenzhen Component Index led global gains, followed by Taiwan's Weighted Index and Japan's Nikkei 225. Hong Kong's Hang Seng Tech Index also performed relatively well, driven by leading companies like Alibaba.
Regarding market trends, the Shanghai Composite Index found some support after pulling back to the 30-day moving average, stabilizing and rebounding slightly. It remains within a volatile consolidation range overall. While it has recently reclaimed the 5-day and 10-day moving averages, the entanglement in the moving average system has not completely ended. Barring major exogenous shocks, the market is likely to continue its sideways consolidation trend in the short term, with close observation needed on the resistance around the 3900-point level. The ChiNext Index continues to show relative strength, consistently advancing along the 5-day and 10-day moving averages. Due to the absence of significant overhead resistance in the short term and continuous industrial catalysis, the ChiNext Index may maintain its relative strength. However, given the already steep slope of the index, it might experience accelerated gains or a pullback for consolidation later. Close monitoring is required to track when a reversal in the market's growth style might occur. The STAR 50 Index demonstrated strong offensive characteristics, fueled by its high weighting in domestic chip leaders and its higher daily price limit, contributing to its elastic performance. The Beijing Stock Exchange 50 Index continued its volatile downward trend. Overall, the indices still show a divergent pattern, with the growth style remaining the consensus direction for funds. The market awaits a rebalancing of styles.
Consistent with previous assessments, the current trends in the domestic market are still primarily catalyzed by industry-level news, with macroeconomic factors not being the dominant driver. Short-term market preference remains focused on tech growth. However, from a mean reversion perspective, it might be necessary to appropriately increase the defensiveness of positions.
