A-share market review: Volatile ups and downs!!

$SentinelOne(S.US)hanghai Composite Index sh000001$ Today, it was initially expected to fluctuate downward, but surprisingly, all three major indices ended up rising. Although the trading volume was slightly lower than yesterday, and market activity decreased, the intraday sentiment was quite positive. The innovative drug and consumer sectors steadily advanced, while domestic software stocks surged rapidly due to news stimulus.

However, the performance of defense stocks was less than satisfactory, and hot sectors like semiconductor chips and controlled nuclear fusion continued to show divergent trends. Overall, the market is in a recovery phase, and although it remains volatile, there are clear signs of improvement.

I think the reason why the A-share market, after fluctuating wildly in the morning, managed to rise in the afternoon can be attributed to the following five factors:

1. Shanghai introduced an action plan for the development of the intelligent terminal industry, which directly drove a strong rally in robotics concept stocks in the afternoon. Additionally, expectations of "anti-involution" policies and strengthened capacity regulation in the photovoltaic sector significantly boosted market confidence in growth stocks.

2. A recent meeting emphasized the importance of expanding domestic demand and strengthening the domestic economic cycle, greatly increasing market expectations for a consumption recovery. This also became a key driver of the repeated activity in the consumer sector today.

3. A subsidiary of New Kailai released domestically developed EDA design software, a milestone achievement widely recognized by the market, directly causing domestic software concept stocks to rise against the trend.

4. Heavyweight stocks stepped in to stabilize the market! Undervalued stocks like insurance performed steadily, providing strong support for the broader index and attracting a significant amount of safe-haven capital.

5. The strength of the innovative drug sector brought positive expectations. The upcoming European Society for Medical Oncology meeting injected a strong boost into innovative drug concepts.

In other words, the current market sentiment in A-shares is gradually recovering, with positive news continuously emerging to support the market's rise. However, there are still some concerns in the market.

Now, let’s look at the situation in various sectors:

① Innovative Drugs

This year, BD transactions in the domestic innovative drug sector have been particularly eye-catching, becoming a focal point for the market. In the first half of this year alone, the total transaction amount reached $60.8 billion, $3.7 billion more than the full year of 2024, representing a year-on-year growth of over 129%.

Some institutions noted in reports that the current high heat of BD transactions is expected to gradually cool down. In the future, the market will pay more attention to companies' own revenue and profit growth, and the differences in performance among companies may become increasingly apparent.

② Consumer Sector

A recent economic situation symposium with experts and entrepreneurs proposed accelerating counter-cyclical adjustments, making full use of policy tools, and removing obstacles in key areas through reforms. At the same time, efforts will continue to expand domestic demand, enhance the domestic economic cycle, and cultivate new growth points for domestic demand.

Moreover, starting from mid-October, the e-commerce industry officially entered the "Double 11 season." Major e-commerce platforms have quietly launched promotional campaigns through live-streaming and subsidies, which will help tap into consumers' purchasing potential.

③ Domestic Software

At the 2025 Bay Chip Expo, Qiyunfang Electronics Technology showcased two newly developed domestic EDA design software with schematic and PCB design capabilities. In terms of key circuit design metrics, this software has reached industry-leading levels. Its performance is 30% higher than existing leading products and can effectively shorten hardware development cycles, improving efficiency by over 40%.