A-shares morning session: focus on weight-loss drugs and consumer sectors

$Pro Shrt S&P 500(SH.US)000001$ Yesterday, affected by the overnight sharp decline in U.S. stocks, the market opened lower at the start. However, it quickly rebounded and turned positive.

During the session, the real estate sector played a stabilizing role, while thematic stocks like lithography machines and chips took turns to perform, driving the market upward to a peak near 3284 points. Eventually, the Shanghai market achieved eight consecutive positive closes. Strangely, though, the profitability effect on individual stocks was barely noticeable. This is understandable because this rebound was on low volume. In low-volume conditions, rebounds are destined to be localized, which aligns with what we often call divergence and differentiation.

Although the market remains in a low-volume state today, domestic capital actually flowed in, which is a good sign—much better than the continuous outflows we’ve seen recently. Overall, the market has been in low volume for a while, and the resistance near 3300 points is quite strong. Without increased volume, the market simply can’t break through this level. Meanwhile, there’s a gap near 3186 points, almost like a downward pull.

However, the market index has become somewhat distorted lately, so obsessing over it isn’t very meaningful. Therefore, the general advice is to focus on individual stocks, buy low, but avoid high-priced stocks and underperforming thematic stocks—especially with the end of the month approaching, watch out for potential bombs.

Now, let’s talk about opportunities in thematic stocks.

Weight-loss drugs

From a news perspective, a company announced positive Phase 3 top-line results for ACHIEVE-1 on the 17th, evaluating the safety and efficacy of orforglipron compared to a placebo. Notably, orforglipron is the first oral small-molecule glucagon-like peptide-1 (GLP-1) receptor agonist without dietary or fluid restrictions. This news directly spurred a significant rise in Eli Lilly’s stock price.

Weight loss has now become a national priority, and pharmaceuticals are part of the broader consumer sector. We all remember the "drinking and pharma" rally in the A-share market before. With consumer momentum strong recently, the pharma sector still has room for repeated performances. Investors can pay attention to some undervalued related stocks.

Consumer sector

The consumer sector stands out prominently in the rally ladder. Apart from Hongbaoli, stocks like Guofang Group, Taimushi, and Guoguang Chain are almost all consumer-focused. It’s obvious where the money is flowing. For previously highlighted themes like tourism/hotels, dairy, and e-commerce, investors can continue monitoring.

Expectations for the consumer sector remain intact. Those already holding related stocks should stay put, while newcomers should avoid chasing highs and instead look for undervalued stocks with rebound potential. Be cautious—avoid micro-cap and low-performance stocks at all costs!