A-share market review: The index fell below 3,900 points

$SentinelOne(S.US)hanghai Composite Index sh000001$ Today's A-share market opened lower at the start, then fluctuated for a while before continuing to decline. There were several sharp drops during the session, causing the index to plummet rapidly. The ChiNext and STAR Market became the "main forces" leading the decline, while the Shanghai Composite Index fared even worse—just after breaking a 10-year high yesterday, it quickly lost the key 3,900-point level today.

The short-term volatility has been extreme, a stark contrast to the strong performance the day before. It's clear that market sentiment has shifted from optimism to caution. Why? Some tech sectors had risen too sharply, and their valuations are now at historically high levels. With the Q3 earnings season kicking off in October, investors are watching whether these companies' performance can justify their valuations—a key market focus. As a result, funds have started repositioning early, amplifying the adjustment.

However, from a structural perspective, despite the short-term correction, the market's overall resilience remains intact. The flow of capital actually reflects the market's potential for self-repair. Strategically, investors should avoid high-valuation tech stocks at elevated levels. During this earnings validation period, such stocks face significant valuation correction risks. Meanwhile, closely monitor market trends—avoid blindly chasing rebounds or rallies in the short term.

Now, let’s look at thematic stock opportunities:

1. Consumer

Today, the food and beverage sector performed strongly, especially dairy and beverages. For example, Manor Dairy surged to its daily limit within just five minutes of opening—its second consecutive limit-up. Yangyuan Zhihui also hit the limit-up, while New Hope Dairy, Maiquler, and Dongpeng Beverage posted notable gains. With policy support for domestic demand and increasingly rational consumer behavior—favoring emotional and health-driven spending—the sector offers structural investment opportunities.

But as we noted earlier, the consumer sector's trajectory still hinges on liquor stocks. If liquor stocks keep falling, the sector will only see selective opportunities. Moreover, if newer stocks can't stabilize, previously strong stocks will struggle too.

2. Non-ferrous Metals

Precious metal futures fell last night, and today, only Silvercorp Metals and Jiangxi Copper performed modestly. Gold and silver largely followed broader trends. Whether 4,081 is a short-term peak remains to be seen.

Gold's recent rally has been too rapid—investors should lock in some profits. Precious metals are highly sensitive to cyclical and policy shifts. Another key factor is whether interest rates will be cut again in October.