The market experienced volatile adjustments, with major indices initially rising before retreating. The combined trading volume of the Shanghai and Shenzhen markets reached 2 trillion yuan, down 56.2 billion yuan from the previous session. Over 3,100 stocks declined, while sector rotations remained rapid. Gains were led by organic silicon, fluorochemicals, phosphorus chemicals, and batteries, while AI models and software development lagged. At the close, the Shanghai Composite fell 0.25%, the Shenzhen Component dropped 0.36%, and the ChiNext Index lost 0.51%.

In today’s broker morning briefings: - **East Money Securities** noted that market rebalancing persists, focusing on three themes. - **CITIC Securities** suggested moderately increasing exposure to chemicals, non-ferrous metals, and new energy. - **Huaxi Securities** highlighted November as favorable for "small-mid caps + thematic investing."

**East Money Securities: Market Rebalancing Continues with Three Themes** Last week saw narrow fluctuations, with structural divergence in growth stocks and cyclical sectors boosted by PPI-driven price hikes. Short-term trends show underperformance among previously strong sectors, while stability and next-year growth prospects gained traction. Long-term, AI remains dominant, but near-term uncertainties—such as the U.S. government shutdown—weigh on overseas markets, potentially dampening risk appetite for A-share tech stocks. Earnings misses by some overseas AI computing firms also signal ongoing rebalancing. Key themes include: 1) AI-driven growth extensions (e.g., power shortages) and emerging themes; 2) anti-internalization and cyclical commodities amid stable growth expectations; 3) undervalued sectors with improving fundamentals and favorable positioning.

**CITIC Securities: Moderate Overweight in Chemicals, Non-Ferrous Metals, and New Energy** October’s heightened volatility reflects shifting capital flows, with steady absolute-return funds reducing the efficacy of aggressive timing strategies. The critical variables remain overseas business stability and AI progress, tied to U.S.-China relations and infrastructure investments. Beyond TMT, sectors like chemicals, non-ferrous metals, and new energy—now over 60% of institutional holdings—are indirectly buoyed by AI narratives. Rather than avoiding AI, investors should target sectors with rising ROE trends, such as historically depressed industries like chemicals and non-ferrous metals, where profitability and sentiment are near cyclical lows.

**Huaxi Securities: November Favors Small-Mid Caps and Thematic Plays** Historical data shows small-cap outperformance in November, driven by A-shares’ earnings and macro "vacuum period," which spurs thematic bets on future trends. Recent margin trading (over 10% of turnover) reflects sustained market activity and loose liquidity. External dollar pressures are temporary and limited, but the U.S. government shutdown warrants monitoring. Sector recommendations: 1) "15th Five-Year Plan" themes (AI applications, robotics, energy storage, localization, new materials); 2) "anti-internalization" beneficiaries like chemicals; 3)港股創新藥 signals for A-shares.