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Everbright Securities: Pre-holiday sentiment weak, A-shares may stay range-bound
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Everbright Securities forecasts that China's A-share market will likely maintain a range-bound consolidation pattern before the upcoming Mid-Autumn Festival and National Day holidays. The analysis notes that the market experienced a pullback this week due to declining risk appetite, with major broad-based indices generally falling. The Shanghai Composite Index performed best with a -0.6% change, while the SME Board performed worst at -2.7%. The valuation of the Wind All-A Index is at the 79.3% percentile since 2010. Positive factors include the easing of external liquidity concerns after the Fed's rate decision, positive signals from Sino-US economic and trade consultations, and continued domestic pro-growth policies. However, headwinds include the Fed's hawkish stance suggesting further rate hikes, weak domestic consumption, and low willingness to invest ahead of the long holiday. The report recommends three balanced allocation directions: hard technology sectors, real estate and coal, and non-bank financials. Key risks include overseas risk disturbances exceeding expectations and a sharp decline in market sentiment.
Source report
Market Overview
The A-share market experienced a pullback this week, driven by declining risk appetite and weakening market sentiment. Major broad-based indices broadly declined.
Among the key indices, the Shanghai Composite Index performed relatively best with a -0.6% change, while the SME (Small and Medium Enterprise) Index posted the weakest performance at -2.7%. The current valuation of the Wind All-A Index stands at the 79.3rd percentile since 2010.
Sector Performance
Best-performing sectors:
- Real estate: +2.3%
- Coal: +2.1%
- Beauty and personal care: +1.7%
Underperforming sectors:
- Non-ferrous metals
- Communications
- Electric power
Key Events This Week
Policy and Diplomacy
High-level exchanges between China and the United States were密集 this week. Key developments include:
- President Xi Jinping's state visit to the United States
- China-U.S. economic and trade consultations held in New York
- Premier Li Qiang's inspection tour in Shanghai, emphasizing artificial intelligence
Economic Data
The September Loan Prime Rate (LPR) remained unchanged, reflecting a continued prudent monetary policy stance. According to the China Interbank Offered Rate (Shibor) center:
- The 1-year LPR was set at 3.0%
- The 5-year and above LPR was set at 3.5%
- Both rates were unchanged from the previous month
China's lending rates have remained at low levels this year. In August, the weighted average interest rate on new corporate loans was slightly below 3%, while the weighted average rate on new individual housing loans was approximately 3.1%.
Industry Developments
- The 2026 World New Energy Vehicle Conference opened in Haikou
- The 2026 Yunqi Conference opened in Hangzhou, with a core focus on Agentic AI
- Meta's personal AI agent "Muse" surged in popularity, topping the U.S. App Store free chart
Market Outlook: Consolidation Likely, Three Balanced Allocation Directions
The market is expected to maintain a volatile consolidation pattern before the holiday period.
Supportive factors:
- The "landing" of the Fed's rate decision has temporarily alleviated external liquidity concerns
- China-U.S. economic and trade consultations have sent positive signals
- Domestic pro-growth policies continue to gain momentum, with the central bank clearly committed to maintaining liquidity
- Improvement in August production-side data provides fundamental support
Constraining factors:
- The Fed's hawkish stance suggests further rate hike expectations remain this year
- The high overseas interest rate environment continues to constrain valuations of high-growth sectors
- Weak domestic consumption means domestic demand recovery still requires further policy support
- Approaching dual holidays (National Day and Mid-Autumn Festival) dampen capital participation willingness, with pre-holiday trading volumes likely to remain low
Three Balanced Allocation Directions
- Hard technology track – Focus on semiconductors
- Agriculture, forestry, animal husbandry, and fishery
- Non-bank financials
Risk Analysis
- Overseas risk disruptions may exceed expectations
- Historical patterns may become invalid
- Market sentiment could decline significantly
Source: Everbright Securities
Source
东方财富网-财经导读Eastern
Part of this Story
Chinese brokerages see A-share rebound window after Fed rate hike, cite AI catalysts and holiday effects