A-share Market Close | ChiNext Index Falls 4.45%; Banks and Commercial Aerospace Buck the Trend

On October 29, the three major A-share indices opened lower and moved lower, trending downward unilaterally throughout the day, with the ChiNext Index and the STAR 50 Index both falling more than 4%. As of the close, the Shanghai Composite Index fell 0.82% to 3,651.43 points, the Shenzhen Component Index fell 2.92% to 11,138.20 points, the ChiNext Index fell 4.45% to 2,517.59 points, the STAR 50 fell 4.27% to 1,228.09 points, and the BSE 50 fell 3.88% to 910.08 points. Combined turnover of the Shanghai and Shenzhen markets was RMB1.556524 trillion, down RMB71.963 billion from the previous trading day. Across the market, 789 stocks rose, 4,795 fell, and 63 were flat, with 39 hitting the daily limit up and 41 hitting the daily limit down; rising stocks accounted for about 14%. By sector, Aerospace Equipment II rose 6.84%, Coal Mining rose 2.42%, City Commercial Banks II and State-owned Large Banks II both rose 2.39%, Wind Power Equipment rose 2.33%, and Insurance II rose 1.76%. Among SW Level-1 industries, Coal rose 2.21%, Banks rose 1.97%, and Food & Beverage rose 1.17%. The biggest decliners were Communication Equipment, down 8.94%; Components, down 8.07%; Other Electronics II, down 5.30%; Semiconductors, down 5.13%; Automation Equipment, down 5.01%; and Consumer Electronics, down 4.74%. Among SW Level-1 industries, Telecommunications fell 7.56% and Electronics fell 5.47%. Drivers In the early hours of October 29, the Federal Reserve announced it would keep the target range for the federal funds rate unchanged at 3.75% to 4.00%, with the decision passed by a 10-2 vote; the two dissenters favored a 25-basis-point rate hike. The statement said economic activity was "expanding strongly" and reiterated that inflation remained elevated. In after-hours U.S. trading overnight, Alphabet reported third-quarter results: revenue of US$127.577 billion, up 25% year on year, below the market expectation of US$128.2 billion; adjusted earnings per share of US$2.67, below the market expectation of US$3.02; diluted earnings per share under U.S. GAAP were US$2.12, compared with US$2.87 a year earlier. Free cash flow for the quarter was -US$9.1 billion, negative for the second consecutive quarter; capital expenditure was US$51.4 billion, below the expected US$55.8 billion. The stock fell about 10% at one point in after-hours trading. On the same day, Microsoft's third-quarter revenue was US$92.3 billion, up 19% year on year, with Azure revenue up 48%; its shares rose nearly 3% after hours. Asia-Pacific markets came under pressure in tandem, with South Korea's KOSPI falling more than 2% at one point during the session, and Samsung Electronics' third-quarter chip business operating profit came in below market expectations. In market action, SW Level-1 Telecommunications and Electronics fell 7.56% and 5.47%, respectively; Level-2 Communication Equipment and Components fell 8.94% and 8.07%, respectively; Semiconductors and Consumer Electronics fell 5.13% and 4.74%, respectively. Banks, Coal, and Food & Beverage rose 1.97%, 2.21%, and 1.17%, respectively; Aerospace Equipment II rose 6.84%; Defense and Military Industry Level-1 fell 0.06% and Aviation Equipment II fell 1.45%. Combined turnover of the two markets shrank by RMB71.963 billion from the previous trading day. The National Development and Reform Commission said on October 29 that since the domestic refined oil price adjustment on October 15, international crude oil prices had risen sharply, and it again took regulatory measures on refined oil prices that day. Hot sectors 1. [Commercial Aerospace] Aerospace Equipment II rose 6.84%, the top gainer among SW Level-2 industries for the day, while Defense and Military Industry Level-1 fell 0.06% and Aviation Equipment II fell 1.45%, showing clear divergence within the sector. China Spacesat hit the daily limit up and closed at RMB55.90; the company disclosed its third-quarter report on the evening of October 28, with revenue of RMB3.956 billion for the first three quarters, up 27.52% year on year, and net profit of RMB84.9291 million, up 473.4% year on year. Shanghai Hugong Electric Group, Aerosun Corporation, and Shanghai Geoharbour Construction Group Co., Ltd. hit the daily limit up, while CETC Lantian Technology rose 11.82%. On the news front, the Shanghai Municipal Commission of Economy and Informatization and five other departments issued the Shanghai Satellite Internet Industry Innovation and Development Action Plan (2027-2030) on October 26, proposing that by 2030 the total number of satellites in orbit exceed 3,000 and the core industry scale exceed RMB80 billion. 2. [Banks and Coal] The Banks Level-1 industry rose 1.97%, with State-owned Large Banks II and City Commercial Banks II both up 2.39%; BQD rose 8.02%; Industrial and Commercial Bank of China rose 2.57% to RMB8.78, China Construction Bank Corporation rose 2.29% to RMB12.04, Bank Of China rose 1.99% to RMB7.16, and Agricultural Bank Of China rose 1.75% to RMB7.56. The combined total market capitalization of the four major banks' A+H shares exceeded RMB10 trillion for the first time. The Coal Level-1 industry rose 2.21% and Coal Mining rose 2.42%; Kailuan Energy Chemical hit the daily limit up, and China Shenhua Energy rose 3.97% to RMB51.62. 3. [Food & Beverage and Ice-and-Snow Economy] The Food & Beverage Level-1 industry rose 1.17%. Qingdao Foods hit the daily limit up at the open and closed at RMB18.13, its fourth consecutive trading day of limit-up since October 26; Zhongyin Babi Food rose 10.03%, Shandong Huifa Foodstuff rose 10.01%, and Zhejiang Yiming Food rose 10.00%, all hitting the daily limit up. The ice-and-snow economy concept strengthened, with Bingshan Refrigeration & Heat Transfer Technologies up 10.03% and Heilongjiang Transport Development up 10.06%, both hitting the daily limit up. According to Meituan data, as of October 28, searches for "skiing" on the platform had risen 125% year on year since the start of October, and bookings for accommodation within 5 kilometers of ski resorts for stays between November this year and March next year had risen 217% year on year. Declining sectors Communication Equipment fell 8.94%, Components fell 8.07%, Semiconductors fell 5.13%, Consumer Electronics fell 4.74%, Automation Equipment fell 5.01%, and Optics and Optoelectronics fell 4.50%, making them the biggest decliners among SW Level-2 industries for the day. These segments have been adjusting continuously since late September; the Components index fell from 24,480.53 points at the close on September 23 to 15,576.33 points, a decline of 36.37% over the period, after rising 4.97% the previous trading day and falling 8.07% on the day. Among individual stocks, Wus Printed Circuit, Avary Holding, and Aoshikang Technology hit the daily limit down; Shengyi Technology fell 8.17%, Victory Giant Technology fell 11.05%, Suzhou TFC Optical Communication fell 19.77% to RMB161.60 and touched the 20% limit-down price during the session, Eoptolink Technology Inc. fell 11.06%, Zhongji Innolight fell 8.53%, EverProX Technologies fell 14.18%, and Henan Shijia Photons Technology fell 14.09%. In semiconductors, Biwin Storage Technology fell 15.79%. On the news front, Suzhou TFC Optical Communication disclosed its third-quarter report on the evening of October 28, with third-quarter revenue of RMB1.923 billion, up 31.5% year on year, and net profit of RMB879 million, up 55.3% year on year. Biwin Storage Technology's third-quarter net profit rose 525.34% year on year but fell 62% quarter on quarter.