On November 4, A-shares staged a broad rally on heavy volume: the Shanghai Composite Index closed up 2.16%, the ChiNext Index rose 6.40%, and the STAR 50 Index surged 9.92%; combined turnover across the two markets reached 2.05 trillion yuan, an increase of 336.8 billion yuan from the previous trading day, with more than 4,600 individual stocks gaining and over 120 hitting the daily limit up.

At the sector level, technology growth sectors such as electronics and communications led the gains, while dividend value sectors such as food and beverage and coal bucked the trend to close lower, sending a clear signal of a market style shift.

The core driver of this round of gains is valuation repair after a sustained period of excessive declines. Following continuous adjustments since July, the valuations of major broad-based A-share indices have fallen back to around the 50th percentile since 2024; the relative valuation of technology growth sectors has returned from previously elevated levels to a position with more compelling allocation cost-effectiveness. Among them, the ChiNext Index's PE-TTM stands at 26.9 times, at the 7.2nd percentile of its own history; the CSI 300 Growth Index's PE-TTM is 13.2 times, at the 5.89th percentile of its own history, both in historically extremely low valuation ranges.

Judging from comprehensive valuation comparisons and style crowding indicators, the relative cost-effectiveness of A-share technology assets has entered a very attractive position, with the basic conditions for a short-term valuation rebound in place. This year's market adjustment has been driven mainly by valuation compression rather than a significant deterioration in earnings, and domestic fundamentals remain resilient. Estimates show that valuation drag on the index this year has reached 24%, higher than the average of all valuation-decline years over the past two decades, meaning the valuation side has accumulated strong repair momentum.

At the positioning level, clearing has proceeded in tandem: margin financing balances in the communications sector have been digested back to fourth-quarter levels of last year, while those in the electronics sector have fallen back to first-quarter levels of this year. Previously, the market saw continued shrinking volume and a full release of trading crowding; today's turnover effectively expanded to the 2 trillion yuan threshold, and if turnover can continue to hold above 2 trillion yuan, it would mean incremental capital is entering the market, further supporting a repair rally.

Over a longer horizon, A-shares have now entered a range with strong appeal for long-term allocation, with considerable room for valuation repair after excessive declines; however, short-term disturbances remain: the digestion of technology sector positioning and cross-asset liquidity rebalancing will still bring volatility, and overseas uncertainties have not yet fully materialized. The first half of November will usher in a dense window of domestic and overseas macro events, and as various uncertainties gradually materialize, medium-term capital is expected to enter in batches after the variables become clearer.

Policy support has also reached a key point of force: today the central bank announced a 0.25 percentage point cut to 1% in the relending rate for stock buybacks and increases in holdings. This tool supports banks in extending matching loans to listed companies and major shareholders for buybacks and stake increases. After the November 2 symposium, the quota applications submitted by various banks have exceeded 200 billion yuan, precisely the policy external force the market had been waiting for. Against the backdrop of gradually converging uncertainties and continuously increasing policy support, A-shares are expected to begin a round of valuation repair.

MACD golden cross signals have formed, and these stocks are rising well.