J.P. Morgan Asset Management China: Oversold rebound combined with policy support, A-shares are expected to start a valuation recovery rally.

Today, the A-share technology growth sector led the gains, with a clear shift in market style. JPMorgan Asset Management China noted that the core driver of this rally is valuation repair following a prolonged period of excessive declines. JPMorgan Asset Management China stated that the main contradiction in this year's market adjustment stems from valuation compression rather than earnings deterioration. Currently, the relative cost-effectiveness of technology assets has become highly attractive, with the ChiNext Index PE-TTM at the 7.2% percentile of its own history. Meanwhile, on the positioning front, chips have been fully cleared out, with today's trading volume surging to 2.05 trillion yuan. If this level can be sustained going forward, it means the entry of incremental capital will further support the repair rally.