CSI 300 Falls 0.08%
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This week, the A-share market entered a tentative rebound phase, with investor sentiment oscillating amid a flurry of domestic macro policy announcements and shifting external interest rate expectations. The SSE Index(000001) declined by 0.34% for the week. After briefly consolidating above its 5-day and 10-day moving averages, it weakened again, remaining 3.59% below its one-year high. Trading volume relative to the 50-day moving average dropped to -0.99, indicating insufficient participation to support a sustainable rebound structure—thus, confirmation of a reversal signal remains pending.
The CSI 300(000300) edged down slightly by 0.08%, yet its short-term structure remains relatively solid, with both the 10-day and 20-day moving averages still exhibiting positive divergence—suggesting stronger institutional (buying support) in large-cap sectors at current lower levels. The Shenzhen Index(399001) rose 0.84%, showing a mild rebound supported by its 10-day and 20-day moving averages, with improved trading activity in electronics and manufacturing supply chain stocks. The ChiNext Index (399006) led all major benchmarks, surging 2.74% and now standing 28.24% above its 200-day moving average. It regained investor attention following the policy emphasis on innovation-driven growth, though its rapid short-term gains warrant close monitoring of volume sustainability.
The Central Economic Work Conference has clarified China’s economic policy direction for 2026, stressing “strengthening domestic demand as the primary engine, adhering to innovation-driven development, stabilizing the real estate sector, and promoting investment.” It also introduced a cross-cycle regulatory framework, signaling a balanced approach between short-term growth stabilization and long-term structural optimization. This policy stance bolsters market expectations for medium-to-long-term economic expansion and corporate earnings recovery, while supporting valuation repair in equity assets.
On the fiscal front, the special treasury bonds maturing in 2025 will be rolled over at par without increasing the fiscal deficit, preserving policy space. In real estate, the government continues its strategy of “controlling new supply, reducing inventory, and optimizing housing quality,” recently imposing height restrictions on residential buildings (capped at 80 meters or 26 stories). This reaffirms a focus on structural refinement rather than broad stimulus, which benefits high-quality industry leaders by stabilizing their long-term operational outlook. Energy storage, new energy, and innovative tech sectors are gaining tailwinds from explicit policy signals favoring innovation, with robust global demand—particularly large-scale lithium iron phosphate (LFP) energy storage orders—providing clear earnings visibility.
Internationally, the S & P 500 Index(0S&P5) and Nasdaq Composite(0NDQC) posted modest weekly gains of 0.45% and 0.07%, respectively. U.S. economic data continues to influence global liquidity expectations. The EIA reported a crude oil inventory draw of 1.812 million barrels—less than anticipated—indicating limited supply tightening. Meanwhile, initial jobless claims rose to 236,000, highlighting a noticeable slowdown in the labor market.
The Federal Reserve lowered the upper bound of the federal funds rate to 3.75% from 4.00%, in line with market expectations. Markets now broadly anticipate two rate cuts in 2026, with easing likely to begin early next year. This accommodative monetary backdrop should continue to provide marginal support for risk assets, though the pace and magnitude remain uncertain. Criticism from Donald Trump and some market participants regarding the modest cut size underscores ongoing internal divisions within U.S. monetary policy circles, creating short-term volatility in global capital flows.
Among sectors, the top three gainers this week reflected strong policy and demand drivers. Bldg-Maintenance & Svc(G7340IG.CN) led with a weekly surge of 15.73%, on volume of approximately 2.295 billion lots. With only seven constituent stocks, this narrow segment reflects heightened investor interest in post-construction real estate services, benefiting from policy support for housing market stabilization and long-term stock improvement. Elec-Semicondctor Fablss(G3676IG.CN) rose 15.33% on 30.651 billion lots of volume, signaling structural investment appetite for fabless semiconductor innovators, boosted by policies encouraging indigenous innovation and expanding AI chip applications. Steel-Specialty Alloys(G3313IG.CN) gained 12.99% on 6.972 billion lots; its products serve high-end manufacturing, energy, and defense sectors, with earnings expectations improving due to industrial upgrading and recovering downstream orders.
The Top 33 Portfolio rose 3.77% this week. Among individual stocks, Henan Shijia Photons Tech(688313) stood out with a weekly gain of 26.45%. The company specializes in R&D and industrialization of optical chips, devices, and indoor fiber cables, operating a vertically integrated IDM model spanning design, wafer fabrication, chip processing, and packaging/testing—establishing high technical barriers and strong independent innovation capabilities. Its O’Neil Score of 61, RS Rating of 99, EPS Rating of 88, and Acc/Dis Rating of A+ (indicating strong institutional buying) collectively highlight its leadership in technical growth, earnings momentum, and market recognition. Although its sector is not among the absolute top performers (sector rating: 36), it remains in a relatively active range. Supported by national policies promoting optoelectronics, communication infrastructure, and domestic substitution, Shijia Photons’ dual drivers of technology and market demand are well-positioned to attract continued structural capital inflows over the medium to long term.
Overall, this week’s A-share rebound was primarily fueled by positive policy signals. However, major indices remain confined within a trading range, and the lack of confirming volume and clear reversal patterns suggests opportunities are largely structural. Growth- and policy-linked themes outperformed, while large-cap sectors held steady. Medium-term market direction hinges on whether upcoming macro data can further validate expectations of economic recovery. The market remains in a “testing rebound” phase, requiring close monitoring of trading volume trends, policy implementation pace, and shifts in external interest rate expectations.
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published on December 12, 2025