Positive news stimulus, rising with heavy volume!!

$SentinelOne(S.US)hanghai Composite Index sh000001$ Today, A-shares rose with heavy trading volume, which was expected by many investors who follow the news. After all, the positive news over the weekend was significant and had a notable stimulative effect on A-shares. Unfortunately, cyclical stocks failed to join the rally. If they had contributed, A-shares might have risen even more sharply today.

Let’s take a closer look at the market:

First, policy-driven positive news acted as the catalyst for today’s surge in A-shares. Over the weekend, a series of positive developments emerged, with the most significant being the CSRC’s announcement of moderately expanding capital space and leverage limits for brokerages—undoubtedly the key driver of today’s rally.

Second, the fintech sector led the gains. Large inflows of capital entered the market today, driving financial stocks higher from the opening bell. The securities sector opened strong and continued to rise, with Industrial Securities hitting the limit-up, while Northeast Securities and Huatai Securities also surged. The entire securities sector rallied collectively, and insurance stocks also contributed, laying a solid foundation for today’s heavy-volume rally.

Third, a flood of incremental capital poured in from outside the market, leading to a significant increase in trading volume in both the Shanghai and Shenzhen markets. From the opening, trading volume expanded rapidly, with much of the incremental capital coming from retail investors and individual traders. It was this influx of capital that provided strong support for today’s rally.

Fourth, cyclical stocks led the losses, acting as a drag on today’s rally, and the profit-making effect of individual stocks was also weak. After the opening, the coal sector was the first to plunge, followed by declines in chemical fiber, oil, steel, and non-ferrous metals sectors, clearly weighing on the market. If cyclical stocks hadn’t dragged, the broader market’s performance might have been even better.

From the perspective of trading volume, market trends, and technical indicators in today’s early session, the current heavy-volume rally is in good shape, and the overall sentiment has improved rapidly. If this trend holds, A-shares could see an even larger-scale rally ahead.

However, the stock market is unpredictable. Although today’s heavy-volume rally provides support for further gains, caution is still warranted to guard against a potential pullback after the surge—blind optimism should be avoided.