The three major indices this week: the Shanghai Composite Index fell 0.6%, the Shenzhen Component Index dropped 2.37%, and the ChiNext Index declined 2.48%. How will the market develop going forward? Let's see what the institutions have to say.

Guosen Securities: Has the Second Wave of the Tech M-Top Begun?

The second wave of the tech rally is gradually kicking off and is expected to drive the market higher in the fourth quarter. Drawing an analogy to the May 19 rally in 1999, the A-share market is currently at the low point of a Wave 4 correction and the early stage of a Wave 5 advance. Looking ahead, the conditions for the second wave to launch may already be gradually in place, and the window for a tech rebound is likely to open around the fourth quarter. If the oil price center continues to shift downward, Federal Reserve tightening expectations ease, and overseas cloud providers' AI revenue growth remains elevated, the rebound room could be considerable. In terms of structure, beyond tech, resource dividend sectors are also worth watching: ① The AI computing power chain may welcome a second wave of an M-shaped top around the fourth quarter, with the magnitude depending on market conditions and industry prosperity verification; within tech, there may also be diffusion toward lower-position directions such as AI applications with fundamental expectations; ② Pay attention to resource dividend sectors represented by non-ferrous metals, coal, and utilities. Under tight supply-demand conditions and rising geopolitical premiums, the prosperity of resource products led by non-ferrous metals is expected to continue.

CSC Securities: Broad Market Pullback Before the Holiday, Structural Prosperity Still Supported

This week, major broad-based A-share indices generally pulled back, with small-caps relatively outperforming. By sector, real estate, coal, and beauty care led gains, while non-ferrous metals, telecommunications, and power equipment lagged. On the fundamentals front, electronics, agriculture, forestry, animal husbandry and fisheries, building materials, pharmaceuticals and biotechnology, and media saw the largest upward revisions in earnings forecasts. In terms of industry prosperity, coal prices rebounded, industrial metals rose broadly, Brent crude pulled back, chemical products recovered, midstream materials remained weak, and storage prices moved higher. On valuation, electronics, telecommunications, and machinery equipment were relatively expensive, while beauty care, food and beverage, and non-bank financials were relatively cheap. On capital flows, telecommunications, electronics, and machinery equipment led in net margin inflows. In terms of trading, TMT continued to heat up, while pharmaceuticals/biotech and real estate saw rising activity. On sector allocation, risk appetite faces short-term pressure before the National Day holiday, favoring defensive positioning; over the medium term, focus on prosperity and capital flow clues, paying attention to growth directions such as electronics, telecommunications, and computers, as well as industries with improving prosperity such as biological products, industrial metals, and chemical raw materials.

Shenwan Hongyuan Strategy Weekly Review and Outlook: Sorting Out Event Windows Worth Watching in Q4 2026

The currently effective AI chain aesthetic remains unchanged: 1. A few directions where fundamental expectations can exceed end-June levels (CPO and a small number of new computing power inflation catalysts generated by GPT6, PCB industry chain price pass-through, etc.). 2. Directions where 2027 prosperity continues to improve relative to 2026 — these will be verified by late-October Q3 earnings reports, and after earnings digest valuations, may diverge and strengthen. Focus on storage, high-end CCL, PCB, and capacitors. 3. Value thematic investments in both tech and non-tech. The current situation closely resembles the first half of 2014 — short-term adjustment, medium-term consolidation with an extended swing band. Greater emphasis should be placed on tech and non-tech themes. The evolution of tech themes is a process of brewing new-stage investment mainlines. Amid short-term market headwinds, the market has not fully explored AI industry progress. This leaves room for thematic rotation in the subsequent rebound phase.

China Galaxy Strategy: Structural Defense Dominates, Hong Kong Stocks Await Clearer Rate Signals

On investment strategy, three main lines should be grasped: The main line is likely structural defense and selective offense under the dominance of existing foreign capital and local funds. Recommendations: (1) Tech sector. Computing hardware and AI infrastructure targets with real orders and earnings support may be relatively resilient, while pure-concept targets lacking earnings delivery may face greater liquidity discounts. Pay attention to optical modules/fiber optics, PCB, high-speed connectivity, AI servers/complete systems, domestic AI chips and wafer foundry, power/backup power/data center supporting facilities, and major cloud providers' model/Agent progress. (2) Innovative drugs and CXO sector. Foreign capital has flowed into pharmaceuticals/biotech relatively heavily recently, and innovative drugs have already recovered after the rate hike landed — careful stock selection and profit-taking targets are needed. (3) Low-volatility dividend plays. In an environment of elevated interest rates and absent southbound flows, the necessity of defensive allocation rises. Pay attention to utilities, telecommunications, energy, and financials.

Everbright Securities: Weak Sentiment Before the Holiday, Market May Remain Range-Bound

The market is likely to continue its consolidation pattern before the holiday. On one hand, after the Fed rate hike "boot landed," the external liquidity concerns that previously weighed on the market have been temporarily alleviated; China-US economic and trade consultations have released positive signals; domestic pro-growth policies continue to gain traction, and the central bank's liquidity support stance is clear; August production-side data improved, providing fundamental support for the market. On the other hand, under the Fed's hawkish stance, rate hike expectations persist within the year, and the overseas high-rate environment's valuation constraints on high-valuation growth sectors are difficult to eliminate in the short term; domestic consumption remains weak, and internal demand recovery still requires further policy efforts; with the dual-holiday long break approaching, willingness to enter the market is insufficient, and pre-holiday trading volume is likely to remain subdued. Focus on three balanced allocation directions. Direction one: hard tech tracks. Focus on semiconductors, AI, high-end manufacturing, and other areas with core technological barriers and domestic substitution logic — these sectors benefit from the upward global tech industry cycle and align with national tech innovation and self-reliance policy directions, possessing strong growth certainty and valuation elasticity; Direction two: policy chain, namely positioning along key policy-driven directions, covering the consumption chain, real estate chain, infrastructure chain, and various sub-sectors. Direction three: other sectors with bottom-up prosperity, such as agriculture, forestry, animal husbandry and fisheries, pharmaceuticals, and non-bank financials — these industries are more driven by their own fundamental logic to achieve independent performance, not relying on strong macroeconomic stimulus, and can provide certain excess returns amid market volatility.

Xiangcai Securities: Precious Metals Under Pressure After Dollar Rate Hike, A-Share Indices Range-Bound Downward

From a longer-term perspective, 2026 is the opening year of the "15th Five-Year Plan." The July Politburo meeting continued to maintain a proactive fiscal policy and moderately accommodative monetary policy, providing important support for the steady operation of the domestic economy and the A-share market's "slow bull" trend in the second half of 2026. From a shorter-term perspective, the market overall exhibited sideways consolidation in September. On one hand, after the September dollar rate hike, US real bond yields rose, pressuring precious metals; on the other hand, the tech sector was disturbed by overseas liquidity tightening and is currently in a process of consolidation and bottoming. On allocation, it is recommended to continue focusing on relatively stable dividend-related areas in the short term, while continuously tracking the AI track that maintains high prosperity, waiting for sufficient adjustment and internal divergence before selectively positioning.

Soochow Securities: The "Seasonal Effect" of the National Day Holiday

The current market has entered a sentiment recovery phase, and the rebound will continue. If subsequent major positive catalysts emerge at the AI/macro level, the rebound expectations can be revised upward. In terms of allocation direction, AI hardware has solid near-term prosperity, long-term growth has not been disproven, and stock prices have adjusted relatively sufficiently — it remains an important lever for obtaining excess returns. Pay attention to: domestic computing power and chip semiconductor industry chain, PCB chain, servers, liquid cooling, cloud/computing power leasing, optical modules, etc. In addition, with the development of the AI industry and the continuous increase in large model penetration, attention should be paid to opportunities in the mid-to-downstream AI segment, including supporting tools brought by AI application penetration, AI middle-layer tracks, and Workflow/Agent orchestration platforms with solid native SaaS foundations.

Zhongtai Securities: Hold Positions Through the Holiday

Maintain a portfolio structure of tech offense and energy security hedging before the holiday. 1) Offensive direction: continue to hold STAR 50, domestic semiconductor equipment, storage, as well as CSI 2000, micro-cap style, and some non-ferrous metal assets. Before the next China-US heads-of-state interaction window, tech remains the main rebound direction. 2) Balanced and defensive allocation: focus on energy security assets such as chemicals, power equipment, and oil shipping, used to hedge Middle East situation flare-ups and oil price tail risks. 3) Thematic direction: focus on AI applications and edge computing. After the holiday, if tech and brokerages become the rebound leaders, the quality of the rally will further improve; if real estate and consumption continue to lead, then judgments on index height and sustainability should be lowered.

Zheshang Securities: Maintain Confidence in the Intermediate Rebound

The intermediate rebound that began in mid-September is still expected to continue. On allocation, based on the judgment that "short-term disturbances do not change the big picture, and the intermediate rebound remains in view," we recommend: On timing, maintain current medium-term positions unchanged, do not be affected by holiday effects before the break, and appropriately add positions on dips after the holiday; On sectors, we still recommend selecting sectors and industries that have experienced larger prior declines (such as dual-innovation boards, Hang Seng Tech, non-bank financials, media, computers, etc.) and appropriately balancing allocations, continuing to participate in this rebound with a balanced structure.

Orient Securities: Hardware Prosperity Continues, Financing Pressure Remains

Over the past week, China and US AI sectors continued to rise in tandem, but US stocks showed strength concentrated in upstream semiconductors, while A-shares were dominated by domestic computing power chips. US stock gains were concentrated in computing power chips, semiconductor equipment, and storage manufacturing — the semiconductor index strengthened significantly, equipment led gains, and the storage chain recovered in sync; server complete systems and hardware networks diverged, with cloud providers and AI applications showing further widening internal strength differences, while power infrastructure was basically flat. A-shares rose modestly overall, with strength mainly concentrated in domestic computing power chips — the semiconductor index and AI index strengthened in tandem; semiconductor equipment and materials pulled back somewhat, optical modules and PCB diverged internally, server computing power and AI applications remained largely sideways, and liquid cooling showed notable weakness. Overall, US stock pricing has diffused toward chips, equipment, and storage, showing broad improvement in upstream hardware; A-share capital, however, is concentrated in domestic computing power chips, with other industry chain segments performing poorly. Although China and the US are moving in the same direction, US stocks have diffused more thoroughly, while A-shares remain primarily driven by localized rotation.