Banking stocks moved higher against the broader market trend. As of press time, CQRC BANK (03618) gained 4.62% to HK$6.12; BQD (03866) rose 1.88% to HK$4.34; CCB (00939) increased 1.1% to HK$7.38; and BANK OF CHINA (03988) advanced 0.96% to HK$4.21.

On the news front, since September, the number of regional small and medium banks cutting deposit rates has continued to expand. On September 25, multiple banks including Henan Luoyang Rural Commercial Bank and Luoning Rural Commercial Bank announced reductions in RMB deposit rates. The adjustments covered demand deposits, notice deposits, and fixed-term deposits of various maturities, with maximum cuts reaching 35 basis points.

Analysts believe this move aims to ease liability-side pressure and mitigate the negative impact of continuously narrowing net interest margins. China Galaxy Securities noted that the adjustment to the 14-day reverse repo operation reinforces the policy rate status of the 7-day reverse repo and improves liquidity management precision, with small and medium banks expected to benefit relatively less than large banks.

Consumer stimulus policies have been further strengthened, and positive factors for banking fundamentals continue to accumulate, with medium-term performance improvement and a turning point anticipated. Key areas to watch include policy effectiveness, improvement in retail business demand and risk conditions, as well as reform measures. Combined with multi-dimensional incremental capital accelerating banking sector valuation restructuring, the institution continues to favor the allocation value of the banking sector and maintains its buy recommendation.