This week (October 20-24), the A-share market showed a steady upward trend, with the trading volume maintaining above ¥1.6 trillion. The Shanghai Composite Index rose by 2.88% for the week, closing at 3950.31 points, marking a new high for the year. The Shenzhen Component Index surged by 4.73%, while the ChiNext Index skyrocketed by 8.05%, achieving the highest weekly gains among main A-share indices.

In the primary industry sectors, the telecommunications index led with an impressive increase of 11.55%, followed by the electronics index at 8.49%. The power equipment, machinery, petrochemicals, and media indices all rose over 4%. Conversely, indices in beauty and personal care, food and beverages, and agriculture, forestry, animal husbandry, and fishery saw declines, with the latter down by 1.36%.

In terms of capital flow, A-shares experienced a slight net outflow of ¥41.08 billion this week. The pharmaceutical, metals, and computer sectors faced the largest outflows, totaling ¥7.398 billion, ¥7.318 billion, and ¥5.942 billion, respectively. Conversely, the electronics, telecommunications, and construction materials sectors saw a net inflow of over ¥4 billion, with respective amounts of ¥7.776 billion, ¥5.957 billion, and ¥415 million.

The profit-making effect in the A-share market was strong this week. On October 25, a survey report titled "Next Week, 4000 Points?" was released, with over 1,200 participants expressing their opinions.

Regarding position changes, 29% of respondents increased their holdings, while 17% reduced theirs, and 3% completely exited their positions. The remaining 51% maintained their positions. Among those managing positions, those fully invested with margin increased by 4 percentage points to 10%, and those with 50%–100% holdings rose by 3 percentage points to 35%. In contrast, fully-invested and cash positions dropped by 5 percentage points to 38% and by 3 percentage points to 4%, respectively. The proportion of those holding below 50% remained unchanged.

About 59% of respondents indicated profitability in the A-share market this week. Among them, 50% reported gains of up to 10%, and 9% reported gains exceeding 10%. Approximately 29% experienced losses of up to 10%, while around 11% reported losses exceeding that.

Nearly 80% of respondents are optimistic about the possibility of the index hitting 4000 points next week. Most survey participants expressed confidence, with over 460 indicating the index would “rise above 4000 points and stabilize,” accounting for 37%. Over 510 believed there would be a “surge above 4000 points, followed by a pullback,” which represents 42%. Therefore, a total of 79% of respondents anticipate the A-share market could reach 4000 points, while 21% remain skeptical.

When asked how high they think the Shanghai Composite Index could go in this bull market, over 460 respondents chose “5000 points,” the highest response at 37%. Currently, the index is at 3950.31 points and continues to trend upward, indicating a positive market outlook from the majority. Among respondents, 28% believe it could reach 4000 points, 9% expect 6000 points, and 26% predict above 6000 points.

Following the recent steady rise in the A-share market, the proportion of respondents perceiving high risk for next week dropped to 16%, a decrease of 7 percentage points. Those considering the market to be of medium risk accounted for 59%, while 20% deemed it low risk, bringing the overall perception back to moderate levels.

The approval rate for the technology sector saw a significant increase for next week. The latest survey results show a surge of 32 percentage points, rising from 32% to 64%, making it the most favored sector among respondents. Meanwhile, the new energy and metals sectors saw declines of 9 and 7 percentage points, respectively.

Looking ahead, Shenwan Hongyuan highlights that the emphasis on technology in the 14th Five-Year Plan is a principal factor driving the recent strength in tech stocks. While the market has shaken off previous panic, the trend of reduced trading volume remains unaddressed, affecting the sustainability of tech growth. The fifth round of China-U.S. trade negotiations in Malaysia has commenced with uncertain outcomes. From a long-term value perspective, the focus should be on low-entry opportunities within the technology sector, alongside following the supply-side rigidities in resource sectors.