Chinese A-shares opened higher and extended gains today, with the Shanghai Composite Index closing up 0.72% at 4147.23 points. The Shenzhen Component Index rose 1.29%, the ChiNext Index gained 1.41%, the Beijing Stock Exchange 50 Index advanced 0.77%, the STAR 50 Index increased 0.54%, and the CSI A500 Index climbed 0.96%. Cyclical stocks including steel and nonferrous metals strengthened, while building materials sectors became active in the afternoon following Shanghai's announcement of new property market policies. Total A-share trading volume reached 2.48 trillion yuan today, up from 2.22 trillion yuan in the previous session. Market risk appetite appeared neutral to strong, with over 3,700 stocks advancing across the market. In terms of market style, small-caps outperformed large-caps while micro-caps slightly underperformed, growth stocks lagged behind value stocks, and STAR Market and ChiNext indices outperformed the main board indices. Overall, risk preference maintained a neutral-to-strong stance.
The post-Lunar New Year rally continues. Historical data analysis from 2006 to 2025 reveals:
The post-holiday rally shows remarkable success rates: out of 20 Spring Festival periods, the one-week success rate reached 16/21 (76%), the two-week rate was similarly 76%, and the one-month rate stood at 71% (15/21), significantly higher than the annual average of approximately 52%. The five declines observed were all caused by external systemic shocks (2008 financial crisis, 2011 inflation tightening, 2016 circuit breaker, 2020 COVID-19, 2022 Russia-Ukraine conflict), rather than failure of the holiday effect itself.
The post-holiday rally delivers substantial returns: average gains of +1.6% in one week, +2.5% in two weeks, and +4.6% in one month; during bull market years (2007/2009/2015/2019), the average one-month gain exceeded 13%; the 2025 post-holiday AI technology rally drove significant advances, with one-week gains of +2.37% and one-month gains of +5.76%, once again validating the post-holiday effect.
This year's Spring Festival rally remains promising. Investors can adopt a core-satellite strategy to capture investment opportunities during the rally. Core positions are recommended in CSI A500 ETF (159338) and Cash Flow ETF (159399); satellite allocations may focus on sector-themed ETFs such as Semiconductor Equipment ETF (159516) and Oil ETF (561360).
Semiconductor Equipment ETF (159516) recovered from early declines and accelerated gains in the afternoon session, closing up 4.56%.
Market news indicates that China's leading chip manufacturers plan to increase advanced chip production. The target is to raise relatively advanced chip output from the current less than 20,000 wafers to 100,000 wafers within 1-2 years. Additionally, more optimistic long-term targets have been set to add 500,000 wafers of capacity by 2030. Foreign media reports confirm China's plan to boost advanced chip production from under 20,000 wafers currently to 100,000 wafers within 1-2 years.
The semiconductor equipment sector continues to benefit clearly from advanced process and memory capacity expansion, with strong medium-to-long-term growth narratives. Multiple catalysts exist, including the listing of two memory companies and market share gains from Japanese manufacturers. The sector benefits from overseas computing demand through memory expansion while gaining confidence from advanced process expansion tied to domestic computing growth. The current semiconductor equipment narrative differs from previous cycle recoveries or import substitution, instead genuinely benefiting from global AI-driven high demand. Interested investors may continue monitoring Semiconductor Equipment ETF (159516).
Shanghai announced "Shanghai Seven Measures" property market policies in the afternoon,主要包括: 1) Reduction of social security requirement for non-local families buying homes inside the outer ring from 3 years to 1 year; 2) Non-local families permitted to purchase one additional property inside the outer ring; 3) Those with residence permits for over 5 years eligible to buy one property; 4) Increase in maximum公积金 loan amount for first-time buyers from 1.6 million to 2.4 million yuan; 5)公积金 loans based on current property ownership rather than loan history.
The new policies benefit the property market inside Shanghai's outer ring, with expectations for gradual price stabilization within the year. These measures lower purchase costs and thresholds while increasing allowable purchase quantities, further releasing purchasing power inside the outer ring. Meanwhile, Shanghai listing volumes have steadily declined since Q4 2025, secondary market transactions remain high, and new home sales during this year's Spring Festival showed significant growth compared to the same period in 2025. Against this backdrop, the new policies are expected to further improve supply-demand dynamics inside the outer ring.
Market views suggest the Shanghai property policies generally meet expectations, potentially releasing rigid demand and reducing funding barriers for home purchases. Shanghai's policies may represent the beginning of a series of future measures. Renewed property market momentum could catalyze building materials and real estate sectors, with some capital potentially anticipating policy expectations during the upcoming Two Sessions. Under anti-internalization trends, the supply-demand structure in building materials may continue optimizing; current valuation expansion processes might replicate the 2025 chemicals sector performance. Investors may consider monitoring the market's largest Building Materials ETF (159745).
Steel ETF (515210) surged 4.27%.
The steel sector's significant gains today were primarily driven by catalysts on both supply and demand sides. On the demand side, anticipated favorable property policies in key cities are expected to solidify demand expectations.
On the supply side, 2026 expectations include production contraction and iron ore price concessions; the industry is projected to accelerate into a survival-of-the-fittest phase. On February 8, the Ministry of Industry and Information Technology released the "Steel Industry Specification Conditions (2025 Edition)," a functional guidance document for industry standardization. This afternoon, the ministry announced the first batch of enterprises compliant with the new specification conditions. Relevant departments are expected to continue promoting classified management of steel enterprises, conducting comprehensive evaluations, and implementing three-tier management based on leading standardized enterprises, standardized enterprises, and non-compliant enterprises, guiding resource allocation toward advantaged companies. With the approaching Two Sessions period, the probability of supply restrictions increases.
The steel sector currently represents a high-beta play with valuation gaps at cycle bottom. After four years of downturn, industry expectations remain low, with this year's winter storage inventory accumulation being the weakest in recent years. Total inventories of five major steel products stand at multi-year lows, reflecting industry caution and pessimism. The bottom suggests relatively full price adjustments, and under low inventory conditions, any supply-demand catalysts could drive steel price upside. Recent consecutive price increases in Southeast Asian steel markets already reflect positive signals. Investors may consider monitoring the market's only Steel ETF (515210).
Rate bonds experienced amplified volatility today, with the 10-year Government Bond ETF (511260) declining 0.16% and TL futures falling nearly 0.5%. From a news perspective, Shanghai's property policy relaxation today reinforced positive property market expectations, potentially pressuring bond markets. However, excessive pessimism toward rate bonds appears premature, requiring further observation of interest rate trends. TL futures movements were partially influenced by contract rollover effects.
From a fundamental perspective, future price trends may diverge from market expectations. Due to carryover effects, 2026 CPI will likely remain in positive territory but without exceeding expectations. The primary reason for positive carryover effects stems from outstanding gold performance in H2 2025 and commodity prices being incorporated into CPI at original levels post-subsidies, creating artificially high CPI readings. Current consumption data shows mixed signals, making it difficult to conclude domestic demand recovery. Expectation gaps regarding prices could further support bond markets throughout the year.
From a liquidity perspective, post-holiday interbank funding tightening may partially explain current bond market adjustments. Compared with pre-holiday宽松 liquidity conditions, interbank certificate of deposit yields have risen 50BP, while DR007 jumped above 1.6, though this may stem from month-end seasonal factors. Temporary interbank funding tightening has likely exerted some pressure on bond markets. Persistent liquidity tightening could potentially break this year's bond market uptrend.
Therefore, short-term panic over news-driven impacts appears unnecessary, but further observation is warranted regarding whether bond markets will continue declining and funding rates will tighten again. Medium-term perspectives suggest limited downside for long-bond yields, with allocation strategies remaining superior to trading strategies. Moderate duration products may be more favored, such as Government Bond ETF (511010) and 10-year Government Bond ETF (511260).
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