This week, the A-share market experienced volatile adjustments, with most broad-based indices closing lower. The STAR 50 and ChiNext indices led the declines. Valuation-wise, indices such as STAR 50 and the Wind All-A Index remain at relatively high percentile levels, with their PE (TTM) percentiles since 2010 all above 85% as of November 14, 2025.

Large-cap value stocks outperformed this week, while sector performance diverged. Industries like diversified holdings, textiles, and retail trade posted gains, whereas communications, electronics, and computers lagged. In terms of market style, large-cap value and small-cap value indices rose, while large-cap growth and small-cap growth indices fell.

**Key Events This Week** On the policy front, the State Council issued measures to further promote private investment, outlining 13 specific initiatives. Meanwhile, ten government departments pushed for data openness to reduce logistics costs, and the National Energy Administration advocated for integrated development of new energy. The PBOC’s Q3 2025 monetary policy report reiterated confidence in achieving annual targets.

Economically, industrial production continued to grow, with strong performance in equipment and high-tech manufacturing. Retail sales expanded, and service consumption accelerated, though fixed-asset investment declined year-on-year, while manufacturing investment maintained growth.

Regarding U.S.-China relations, the U.S. implemented agreements from the Kuala Lumpur economic talks, suspending Section 301 investigations into China’s shipbuilding sector and export control rules, signaling short-term easing. Overseas, the U.S. government ended its shutdown after Trump signed a temporary funding bill. Additionally, Trump hinted at an imminent U.S.-India tariff reduction deal.

**Short-Term Outlook: Wide Fluctuations Likely** This week’s A-share decline was partly driven by overseas events, including SoftBank’s $5.8 billion Nvidia sell-off, which sparked AI bubble fears and triggered a tech stock pullback in the U.S., weighing on A-share AI computing sectors. Meanwhile, Fed officials’ inflation concerns dampened expectations for a December rate cut, reducing risk appetite.

While the broader market remains in a bull phase, short-term volatility may persist. Compared to past bull markets, indices still have room to rise, but under the "slow bull" policy guidance, sustainability may outweigh magnitude. Near-term catalysts appear limited, and year-end caution among investors could lead to consolidation.

**Sector Allocation** Defensive and consumer sectors may outperform in the short term, while TMT and advanced manufacturing merit mid-term focus. During consolidation, undervalued sectors like high-dividend and consumer plays could shine. If liquidity-driven trends persist, TMT may lead; a shift to fundamentals-driven markets would favor advanced manufacturing.

**Risks** 1. Policy implementation delays; 2. Sharp decline in market sentiment; 3. Economic growth significantly below expectations; 4. Escalation in U.S.-China tensions.