Overview
A-shares staged a sharp V-shaped reversal on Friday. Major indices opened lower and drifted down through the morning, with the ChiNext index at one point down more than 3%, before a forceful afternoon rally lifted it to a close up over 4%. The Shanghai Composite gained 0.89% to 3,690.48, the Shenzhen Component rose 2.79%, the Wind All-Share added 2.02%, and more than 4,500 stocks advanced. Turnover swelled to 1.97 trillion yuan, up over 420 billion yuan from the prior day.
On the tape, robotics names surged—Unitree Technology hit limit-up for the first time—while physical AI, fintech, software and semiconductors led gains; ChangXin Memory jumped nearly 8% to reclaim the top spot by market capitalisation on the A-share market. In parallel, the first batch of 18 active ETFs opened to strong demand, raising over 15 billion yuan on day one; products from Morgan Asset Management, E Fund and Fullgoal all sold out within the day and moved to proportional allocation. Guotai Haitong Securities plans to subscribe up to 670 million yuan of its own capital, and ICBC Credit Suisse announced a 100 million yuan self-purchase.
In contrast to onshore enthusiasm, overnight global markets diverged: the Dow fell over 650 points, gold slipped below 4,000 dollars, Brent pushed past 116 dollars a barrel, and both the dollar and yen strengthened—underscoring how energy shocks and rate-hike expectations are weighing on risk assets.
Background & Interpretation
1. Macro and Policy Context
Global capital markets have turned more volatile amid escalating geopolitical conflict and widening disagreement over overseas tech valuations. Next week the Fed, ECB and BoJ all meet; markets broadly expect holds this round but are fixated on forward guidance. CME FedWatch puts the probability of a December Fed hike at roughly 78%, the ECB at about 66%, and the BoJ at around 59%.
Domestically, the certainty of incremental policy support is stronger: the late-September State Council meeting pledged greater counter-cyclical adjustment, while ample liquidity, falling market rates and a counter-trend RMB appreciation have widened the room for autonomous macro policy.
2. Core Drivers and Underlying Mechanisms
The rebound rests on a resonance of liquidity and sentiment. Broad-based ETFs delivered enormous turnover—the E Fund ChiNext ETF topped 19.5 billion yuan, and the Huatai-PineBridge CSI 300 and the ChinaAMC STAR 50 each exceeded 15 billion yuan—providing a liquidity backstop. Meanwhile, the day-one frenzy for active ETFs signals a widening channel for household wealth to flow into equities.
Long-term money is also accelerating its entry. Regulators continue to promote long-cycle assessment mechanisms suited to long-term investing and to broaden the sources and access of medium- and long-term funds, creating a positive loop between policy intent and product supply.
3. Market Structure and Industry Chain Impact
Robotics, physical AI and semiconductors leading gains reflects joint recognition by industrial and secondary-market capital of China’s AI supply-chain momentum. ChangXin’s return to the A-share cap crown highlights the rising pricing weight of memory and compute self-reliance.
The “sold-out-in-a-day” active ETF phenomenon marks an acceleration in the supply of index and strategy tools; product-creation capability and advisory conversion will become the competitive focus for brokers and fund managers.
Implications & Outlook
Near term, geopolitical noise and overseas hike expectations will keep A-share volatility elevated, but ample domestic liquidity and policy certainty form a floor. Medium term, earnings repair anchors the market: as of October 22, over 80% of Q3 profit pre-announcements were positive, and first-half A-share net profit rose 19.5% year on year.
Key variables: the follow-through fundraising and positioning pace of active ETFs, sustained net inflows into broad-based ETFs, the evolution of Fed expectations into December, and the RMB’s effect on northbound flows.
Takeaways for Industry Participants
- Asset managers should seize the active-ETF window, strengthening strategy R&D and advisory conversion.
- Listed firms can time refinancing or incentive plans to sentiment repair, but must match real earnings support.
- Investors should hold a long-term, value-oriented stance and avoid chase-the-rally behaviour.
This column compiles industry information and shares technical perspectives; it does not constitute investment advice.