China's three major A-share indices opened higher collectively on September 3. During morning trading, the indices pulled back and the ChiNext board briefly turned negative, but both markets regained upward momentum before midday. After a rapid decline in the afternoon, a rebound followed, though indices fell again toward the close.

From a sector perspective, shipping, insurance, cultivated diamond, and liquid cooling server segments led the gains, while agriculture, media, education, and photovoltaic sectors experienced pullbacks. Banking stocks saw distribution after hitting consecutive new highs, and the underperformance of major tech names weighed on the ChiNext board.

At the close, the Shanghai Composite Index rose 0.02% to 3,942.09 points, the Shenzhen Component Index gained 0.1% to 13,625.12 points, and the ChiNext Index edged up 0.01% to 3,312.54 points. According to Wind statistics, 1,844 stocks rose across both exchanges and the Beijing Stock Exchange, 3,565 fell, and 139 remained flat.

Total trading volume for both markets reached 1.7589 trillion yuan, down 32.3 billion yuan from the previous session's 1.7912 trillion yuan. Specifically, Shanghai's turnover was 819.9 billion yuan, a decrease of 15.5 billion yuan from the prior day's 835.4 billion yuan, while Shenzhen's turnover stood at 939 billion yuan. As per Dazhihui VIP data, 64 stocks across both exchanges and the Beijing Stock Exchange gained more than 9%, while 32 stocks fell more than 9%.

Insurance and Brokerage Strength; Agriculture Leads Declines

The strength of insurance and brokerage stocks drove the non-bank financial sector to lead gains across the market. Changjiang Securities (000783), Guosheng Securities (002670), GF Securities (000776), China Pacific Insurance (601601), and Jiangsu Financial Leasing (600901) all rose over 3%.

Non-ferrous metals also performed well, with Baiyin Nonferrous (601212) hitting the daily limit up, Hunan Silver (002716) surging over 7%, and Hesheng Holdings (002824), Hunan Gold (002155), Chujiang New Materials (002171), and Hongqiao Holdings (002379) gaining more than 4%.

Shipping stocks boosted the transportation sector, with Dazhong Transportation (600611) and Haitong Development (603162) hitting their daily limits. COSCO Shipping Energy (600026) and China Merchants Energy Shipping (601872) rose over 7%, while Phoenix Shipping (000520), China Merchants Shekou Oil (601975), and Jinjiang Shipping (601083) gained more than 4%.

The agriculture, forestry, animal husbandry, and fishery sectors continued to decline, leading market losses. Fujian Jinsen (002679) and Xinsai Shares (600540) hit their daily limits down, while Wanxiang Denong (600371), Boon Group (001366), Yuehai Feed (001313), and Tianshan Biological (300313) fell over 7%. Denghai Seeds (002041) and Dunhuang Seeds (600354) dropped more than 3%.

Social services also declined significantly, with Chuanzhi Education (003032) hitting the daily limit down, and ShiPu Detection (301228), *ST Gaoke (600730), and Tiansu Metrology (301449) falling over 5%. Kaiwen Education (002659) and *ST Xilv (000610) dropped more than 4%.

Building materials underperformed as well, with XiongSu Technology (300599) and Huali Shares (603038) declining over 5%, and China Jushi (600176), Hainan Ruize (002596), Fujian Cement (600802), Tibet Tianlu (600326), and Yangzi New Materials (002652) falling more than 2%.

September Sector Allocation: Seizing Structural Opportunities Along Prosperity Clues

In its September sector allocation research report, CICC advised seizing structural opportunities under prosperity clues: (1) Technology growth stocks may show divergent trends going forward, requiring selective picks: high-prosperity sectors such as optical communications and PCB within AI infrastructure-related segments still have strong certainty this year and may rebound after overselling. For many semiconductor and computing power companies, the match between fundamentals and valuations still needs attention. Many innovative drug companies are entering the clinical data validation phase, warranting bottom-up attention. (2) Considering geopolitical situations and capacity cycle positions, focus on sectors with improving earnings and supply-demand dynamics, such as construction machinery, power grid equipment, and petrochemicals. The recovery progress of purely domestic-demand industries remains relatively slow and requires further observation.

Huatai Securities released a strategy report stating that in terms of asset allocation, the market is shifting from expansion narratives to repricing based on delivery capabilities and earnings quality. Short-term liquidity expectation tightening may suppress valuations, and during the earnings vacuum period, attention should be paid to whether new catalysts and order validations emerge at the industry level, as well as the September FOMC meeting stance. It recommends prioritizing directions with high earnings visibility, such as communication equipment, semiconductor equipment/materials, and PCB, followed by considering revaluation opportunities in AI applications.

CSC Financial noted in its report that September asset portfolio allocation can center on three main lines: defensive base positions—dividend and high-yield low-volatility assets, plus gold as a hedge against stagflation; structural offense—A-share resource products and hard tech with strong earnings certainty; and on the US stock side, shifting focus from crowded hardware bottleneck segments to cloud vendors, software applications, computing power leaders, and semiconductor equipment. In other words, USD liquidity-sensitive assets may present opportunities in September. Cautious allocation: avoid chasing China's long-duration bonds, and be prudent about upside room for domestic-demand growth sectors. The implied allocation preference ranking: gold, copper, and resource dividend assets first; US software applications, cloud vendors, and computing power equipment second; while long bonds in fixed income, domestic-demand consumption in equities, and aluminum in commodities warrant caution.

CITIC Securities stated in its research report that the 2026 semi-annual reports show the A-share earnings cycle entering an accelerated repair phase, but "earnings improvement" itself is losing its scarcity. The breadth of prosperity diffusion, quality of earnings repair, and degree of market pricing adequacy are becoming key factors for next-stage asset selection. Currently, resources and technology lead in prosperity, traditional industry earnings repair has somewhat diffused, and consumption and manufacturing remain at relatively low levels overall. However, high growth does not equate to high quality, and the "quality" of earnings needs further verification. First, for the tech sector, focus on whether profits can convert to cash, seeking assets with both high growth and high earnings quality, though cash flow pressure should not be summarily dismissed. Second, "anti-involution" cannot be judged solely by capital expenditure contraction or price recovery; observation is needed on whether supply discipline can further transmit to improvements in earnings, cash flow, and capital returns. Third, against the backdrop of RMB appreciation, the impact of exchange losses on earnings quality is unavoidable, with overseas gross margins and pricing power becoming important clues for identifying high-quality overseas expansion. Fourth, dividend investing should shift from high dividend yields and high free cash flow to dividend sources and sustainability, exploring new dividend logic from a dynamic perspective. At the valuation level, the market has begun to differentiate pricing for earnings of varying quality. For the next stage, it is recommended to focus on high-quality, high-prosperity assets where revenue, profit, cash flow, and capital returns improve simultaneously but valuations have not yet fully reflected this.