A-share market closing review | Two major variables are coming! The innovation and entrepreneurship index fell sharply, with the Shanghai Composite Index falling by 1.95%. Nearly 4800 stocks in the market are in the red.

On October 17th, A shares weakened in a volatile manner, with nearly 4800 stocks trading lower. The trading volume was 1.94 trillion yuan, an increase of 6.9 billion from the previous trading day. At the close, the Shanghai Composite Index fell by 1.95%, the Shenzhen Component Index fell by 3.04%, the ChiNext Index fell by 3.36%, and the STAR 50 Index fell by 3.77%. According to Securities Times, there are two major variables in the market: First, under the backdrop of unstable trade situations, there may be a revaluation of high-valued stocks and a possible change in style. Second, the increased fragility of the US financial system may bring about expectations of changes in the global capital markets. On the market front, the technology sector continued to see significant adjustments, with leading declines in computing power, semiconductors, and consumer electronics. ZTE Corporation hit limit down in the afternoon. In addition, new energy, automotive supply chain, and defense sectors were among the hardest hit. Amid the market downturn, banking stocks saw a temporary strengthening, with Agricultural Bank Of China hitting a new high during trading. The coal and steel sector, precious metals, real estate, and innovative pharmaceuticals saw fluctuations after taking turns in performing well. Looking ahead, CMSC believes that while short-term adjustments are inevitable, the market still shows resilience. There is a high possibility of the index hitting new highs after the impact ends. This adjustment may provide an opportunity to optimize the market structure. Popular Sectors: 1. The coal sector saw some activity, with Henan Dayou Energy performing well for six days out of five. Institutional Views: 1. CMSC: Short-term adjustments are inevitable, but the market remains resilient. CMSC believes that short-term adjustments are inevitable, but the market remains resilient. The possibility of the index hitting new highs after the impact ends is high. This adjustment may provide an opportunity to optimize the market structure. In terms of short-term sectors and industries, classic response strategies to the escalation of US-China trade conflicts prioritize self-controllable and internal circulation. Therefore, within the eight major sectors, one can prioritize lower positions with marginal improvements, such as defense, semiconductors, independent control software, new consumer goods, and non-ferrous metals. 2. Debon Securities: Value sectors represented by dividends may continue to perform well in the short term. Debon Securities believes that if trading volume does not increase, the index may continue to face pressure from range shocks. Following external impacts, the market has started to shrink, reflecting a certain risk-averse sentiment. In the short term, value sectors represented by dividends may continue to perform well. However, as negotiations deepen, uncertainties may gradually diminish and, with the upcoming Fourth Plenum and the start of the Fifteenth Five-Year Plan, future growth sectors are still worth long-term positioning. 3. Orient: Short-term adjustments will not change the market's upward trend. Orient believes that in the short term, market hotspots have experienced a resurgence, lacking the group effect of sectors, and trading has significantly cooled down. On Thursday, trading fell below 2 trillion yuan, indicating that, given the ongoing uncertainty in trade disputes, the market will inevitably be cautious. Sectors with previously high gains showed significant pressure, with dividend assets such as coal, insurance, banks, and road and railway transportation performing, but struggling to attract attention. The market needs to consolidate in the short term. Short-term adjustments will not change the market's upward trend. From an operational perspective, maintaining technology stocks as the market's main focus is prudent, and buying on dips remains a good opportunity.