CSI 300 fell by 2.22%
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This week, the A-shares market faced headwinds, with major indices generally declining. The SSE Index(000001) fell 1.47% for the week, closing at 3,839.76 points, signaling a clear short-term correction after several weeks of sideways-to-upward movement. The index remains 1.12% above its 50-day moving average but has dropped below the 5- and 10-day averages, indicating weakening short-term momentum. The CSI 300(000300) experienced a larger decline, down 2.22% to 4,514.23 points, 4.49% below its one-year high. Trading activity across the two markets weakened, with notable fund outflows from the tech growth sector. Growth-oriented sectors bore the brunt of the pressure, with the Shenzhen Index(399001) down 4.99% and the ChiNext(399006) dropping 5.71%, acting as primary drags. Both indices are trading well below short-term moving averages, with ChiNext 3.51% below its 5-day average and 6.33% below its 10-day average, indicating significant downside pressure. Several previously strong small- and mid-cap growth stocks continued to retreat, reflecting a decline in market risk appetite.
In contrast, international markets remained relatively strong. The U.S. S & P 500 Index(0S&P5) and Nasdaq Composite(0NDQC) rose 1.17% and 1.61%, respectively, highlighting short-term divergence between Chinese and U.S. markets. Due to the U.S. government shutdown, many macroeconomic surveys and data releases were delayed or suspended, leaving key economic data unavailable. In the absence of up-to-date, reliable macroeconomic information, policymakers and investors face challenges in accurately assessing economic and inflation trends, increasing market uncertainty and promoting conservative liquidity and sentiment.
The recently released U.S. Beige Book shows the economy is largely flat, with modest growth in only a few regions. Consumer spending is weakening, while manufacturing, agriculture, and transportation remain generally soft. Some improvement is seen in certain financial and real estate activities. Labor demand has slowed, the job market remains stable, wages are rising moderately, but companies face increasing cost pressures. Prices continue to rise, with limited pass-through of costs in some sectors. Businesses generally hold a cautious outlook, concerned about weak demand and policy uncertainty.
Domestically, the National Bureau of Statistics reports that China’s CPI rose 0.1% month-on-month in September but fell 0.3% y/y. Core CPI increased 1% y/y, marking the fifth consecutive month of expansion and the first time in 19 months that it has returned to 1%. PPI remained flat month-on-month and fell 2.3% y/y, narrowing the decline by 0.6 percentage points from last month for the second consecutive month. On the policy front, China announced countermeasures against U.S. Section 301 restrictions on shipbuilding, imposing special port fees on U.S.-related vessels from October 14 onward.
From an industry perspective, cyclical and financial sectors became relative safe-haven targets. In the O’Neil classification, Banks – Monetary Centers (G6020IG.CN) led the gainers with a 5.74% rise, benefiting from stable interest spreads and expectations of steady growth. Energy – Coal (G1319IG.CN) gained 5.54%, supported by firm coal prices and winter restocking expectations. Transportation – Airlines (G4511IG.CN) rose 3.75%, as falling oil prices improved profit expectations. In contrast, technology and consumer sectors underperformed, with previously high-flying electronics and food & beverage sectors experiencing noticeable pullbacks.
Overall market activity declined, with the TOP33 strong stocks list averaging a 5.52% drop this week; only six stocks advanced. The top performer was Shantui Con.Mch. ‘A'(000680), up 11.55% for the week, in the Machinery – Construction/Mining sector (G3531IG.CN). The company has an EPS Rating of 98, RS Rating of 74, and O’Neil Score of 65, reflecting strong earnings growth. The construction machinery sector benefited from ongoing infrastructure investment, and product mix optimization along with smart manufacturing initiatives provided additional support.
In summary, the A-shares market entered a short-term adjustment phase this week, with growth sectors retreating while defensive sectors such as banks and coal attracted capital. Investors should monitor market sentiment and upcoming policy developments, remain cautious amid short-term volatility, and focus on stocks with stable earnings growth and favorable industry trends. Next week, 1,039 companies are scheduled to release earnings reports, which may become a new focus for the market.
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published on October 17, 2025