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On October 9, A-shares staged a V-shaped rebound, with overall price and volume gains remaining modest. Daily turnover exceeded 1.9 trillion yuan, and nearly 3,300 individual stocks closed higher. The AI corpus sector surged dramatically, while PCB (printed circuit boards), electronic components and related sectors led the declines.

Market participants noted that the tech sector had undergone sufficient adjustment before the holiday, with positioning and sentiment fully released. Post-holiday capital return combined with oversold repair formed the primary drivers of the rebound. Meanwhile, broad-based ETFs saw modest increases in volume, indicating that panic selling pressure has somewhat diminished. The current recommendation is to adopt a barbell-style balanced allocation strategy, maintain neutral positions and avoid one-sided heavy bets.

Regarding when the tech sector might stabilize, three key signals bear watching: first, the sector stops experiencing sustained large-scale net capital outflows, posts a volume-backed positive candle and market turnover returns above 2 trillion yuan; second, US Treasury yields see a phased pullback in October, with the Nasdaq and Nvidia halting their declines; third, after third-quarter earnings are fully disclosed, leading compute-chain companies deliver on orders and gross margins, dispelling market concerns about weakening demand.

Electronics and Telecom Sectors Weaken

A-shares opened lower and dipped in morning trading, then staged a V-shaped rebound in the afternoon. Most indices closed in positive territory, though gains were limited. The Shanghai Composite Index rose 0.05% to 3,813.79 points, the ChiNext Index gained 0.22% to 3,043.33 points, and the Shenzhen Component Index added 0.17%. The CSI 300, SSE 50 and STAR 50 edged slightly higher, while the Beijing 50 rose 2.49%.

In the two trading days after the National Day holiday, volume expanded for consecutive sessions, with total daily turnover across Shanghai, Shenzhen and Beijing markets increasing by 222.4 billion yuan to 1.92 trillion yuan. On the leverage front, as of October 8, margin financing and securities lending balances across the three markets rose to 2.57 trillion yuan.

On the board, computer software, PCB, MLCC, passive component concepts, electronic components and general equipment sectors led the declines, while AI corpus, short-drama interactive gaming, film and television concepts, and Kuaishou-related sectors posted strong gains. Among the 31 Shenwan first-level industries, 23 closed higher. The media sector surged 5.28%, with Chinese Online and Mango Excellent Media hitting the 20% daily limit. Computer, commercial retail and nonferrous metals sectors each rose more than 2%, while textiles and apparel, agriculture, forestry and fishing, beauty care, and non-bank financial sectors also performed well. Defense and military industries fell 1.7%, with electronics, banking, machinery equipment and telecommunications sectors also declining.

Afternoon buying lifted individual stocks, with 3,297 stocks closing higher for the day and 72 hitting the daily limit. A total of 2,145 stocks declined, with 10 hitting the downside limit. Among actively traded stocks, seven exceeded 100 billion yuan... seven stocks had daily turnover exceeding 10 billion yuan. Zhongji Innolight fell about 1% to 775.29 yuan per share, New Easy Light closed down 2.19% at 370.2 yuan per share, Dongshan Precision dropped 3.43% to 145.49 yuan per share, and GigaDevice declined 2.37% to 326.46 yuan per share. JAC Motors hit the downside limit intraday before closing down 7.97% at 22.75 yuan per share.

Phased Bottom Rebound

Commenting on today's rebound, Hu Mohan, fund manager at Mingze Investment, believes that the earlier emotional sell-off and micro trading structure clearing have run their course. After the market pulled back to key support levels and received confirmation of capital absorption, a phased bottom rebound can basically be confirmed. No major negative fundamentals have emerged, and the prior adjustment was more of a short-term disturbance that does not change the medium-to-long-term upward trend. From a capital behavior perspective, broad-based ETFs saw significant volume increases, with allocation-oriented funds clearly willing to absorb declines, and panic selling pressure has somewhat diminished.

Huang Huayan, general manager of Dadao Xingye Investment, offered a different view: today the Shanghai Composite held the 3,741-point level, but many individual stocks hit new lows. The index volume rebound may be a short-term pulse, and this intraday V-shaped rebound is unlikely to reverse the index's weak pattern. The volume expansion was mainly driven by the brokerage sector's rebound consuming capital. During the earlier weak consolidation phase, brokerages remained dormant, and whether this rebound can continue depends critically on the brokerage sector's sustainability.

Cheng Tianyi, senior analyst at Qingdao Anzhi Investment, analyzed that today's volume-backed V-shaped rebound was more driven by trading-level factors: the tech sector had adjusted sufficiently before the holiday with positioning and sentiment fully released, and post-holiday capital return combined with oversold repair formed the main drivers, while broad-based ETFs also saw modest volume increases.

Liu Yan, chairman of Anjue Assets, stated that this morning major indices opened higher collectively before quickly pulling back and diverging. The broader market edged into positive territory, but growth-style indices underperformed, with tech-related sectors showing relatively notable adjustments, and the overall market rebound was very limited. Trading volume remained at low levels, market activity was at a phased low, and the rebound lacked volume support throughout, with insufficient willingness from capital to enter.

Regarding this weak price-volume performance, Liu Yan further analyzed: first, pre-holiday market sentiment was dominated by risk aversion, with long holiday external volatility and geopolitical factors bringing uncertainty. Capital favored defensive positioning, wait-and-see sentiment was strong, and trading willingness declined. Second, the stock-game dynamic has not been broken, incremental capital entry is weak, and on-market capital is merely rotating between sectors, taking profits from growth sectors with larger prior gains and shifting to defensive tracks such as pharmaceuticals, agriculture and dividend plays, which is insufficient to support a comprehensive systemic rebound. Third, technically, this is an exhaustion-style repair after consecutive prior adjustments, not a trend reversal. Although low volume levels carry phased bottom characteristics, the sustainability of a rebound without volume support is questionable. Fourth, institutions are generally cautious about the post-holiday market, and no window-dressing actions appeared at the third-quarter closing point, with capital tending to adjust positions after the holiday based on market conditions.

The first trading day after National Day did not bring a positive start for A-shares, and the second trading day saw modest price and volume gains. Xia Fengguang, fund manager at Rongzhi Investment, interpreted this: the post-holiday market weakness and rising panic sentiment stemmed from sharp declines in high-valuation growth sectors that elevated risk aversion. This is essentially a continuation of the valuation-compression trend in high-valuation growth stocks, a rebalancing after the extreme divergence in the first half of the year, not a comprehensive bear market.

When Will Tech Stocks Rebound?

It is worth noting that in the two trading days after the holiday, technology sectors represented by electronics and telecommunications weakened for consecutive sessions, dragging down the dual-innovation indices. Regarding the continued decline in ChiNext and STAR Market sectors, Xia Fengguang analyzed several factors: first, domestic and overseas factors resonated—US Treasury yields continued to rise, suppressing growth stock valuations, compounded by the sector's large cumulative gains in the first half, elevated valuations and high trading crowding. Second, the current period marks the third-quarter earnings disclosure window, and many purely thematic dual-innovation stocks face pressure from cash flow performance verification.

Xia Fengguang further stated that this adjustment is not a comprehensive bear market. The valuation-compression trend in dual-innovation sectors is nearing its end, and there remain many positives not yet fully priced in by the market. If overseas long-end rates decline and domestic third-quarter earnings can extend the impressive performance of half-year reports, the probability of risk appetite recovering in October is very high. Among them, dual-innovation leading stocks that have fallen sufficiently and show impressive earnings growth may rebound. Commodity resource stocks have also adjusted sufficiently, and the non-bank financial direction also merits moderate attention.

When will the tech sector stabilize? Cheng Liang believes the tech mainline revolves around new quality productive forces. Three signals must appear simultaneously to represent a reliable bottom: first, on the capital front, the tech sector no longer experiences sustained large net outflows, posts a volume-backed positive candle and turnover returns above 2 trillion yuan. Second, on external conditions, US Treasury yields see a phased pullback in October (at least no new highs), and the Nasdaq and Nvidia halt their declines. Third, on fundamentals, after third-quarter earnings land, leading compute-chain companies deliver on orders and gross margins, dispelling market concerns about demand decline.

On timing, Cheng Liang noted that the oversold bounce in the first week after the holiday is sentiment repair, not a trend reversal. The real stabilization window is in mid-to-late October during dense third-quarter earnings disclosure. After earnings verification lands, segment leaders with order support are expected to stabilize first. A sector-level trend rally would require the three conditions to resonate from late October to November. Before stabilization, internal sector divergence will continue to intensify, and purely thematic small-cap stocks will continue to see bubbles squeezed out.

Rebound May Continue Next Week

What are the core factors currently influencing the market? How will A-shares perform in the short term? Yuan Huaming, general manager of Huahui Chuangfu Investment, stated that market conditions were weak in late September, and post-holiday risk appetite repair opportunities exist. The October market has upward momentum, but a comprehensive broad rally is unlikely. The domestic economic recovery remains unclear, and the effectiveness of favorable policy implementation carries uncertainty. Combined with US Treasury yields remaining elevated, external market volatility and geopolitical risks, these will interfere with the A-share market's capital environment and sentiment. Meanwhile, the earnings disclosure period will also bring uncertainty. These factors will weigh on October market conditions, which will likely maintain a pattern of consolidation and sector rotation.

Cheng Tianyi believes the factors currently affecting the market remain diverse: externally, the Fed's rate path and US Treasury yield movements repeatedly disturb risk appetite; internally, domestic pro-growth policy expectations and third-quarter earnings verification form a resonance. Under mixed bullish and bearish forces, a one-sided short-term trend is unlikely. A-shares still have a foundation for further rebounds, but constrained by insufficient incremental capital and external disturbances, rebound space is relatively limited, and the pattern is more likely to be consolidation after an oversold rebound.

On positioning, it is recommended to focus on quality directions where the industrial logic has not been disproven and short-term oversold conditions have appeared.

Hu Mohan stated that core variables mainly lie in external liquidity constraints, domestic policy pace, third-quarter earnings verification and geopolitical disturbances. External long-end rates at high levels suppress valuations, but domestic fundamentals show no significant negatives. Next week will likely see a continuation of the rebound, but given no new large-scale positives have emerged, the rally's magnitude will be limited and should be viewed as a rebound for now. The Shanghai Composite Index will likely fluctuate within the 3,800-4,200 point range for the year, with multi-sector rotation dominating.

\"The short-term post-National Day market has a foundation for a restorative rebound. Wait-and-see capital suppressed by long holiday risk aversion will gradually return, and market activity is expected to recover. However, the rebound's magnitude will be generally modest, and a trend-based one-sided rally will be difficult to achieve,\" Liu Yan predicted. October A-shares will continue a consolidating and diverging structural market, with the core logic shifting from valuation gaming to third-quarter earnings delivery. Growth tracks with high prior prosperity and strong earnings certainty are expected to see phased capital replenishment, but constrained by overall liquidity and overseas market volatility, the index's overall upside is limited, and the market may manifest more as inter-sector rotation and divergence. Recently, policy dividend areas such as real estate will see phased thematic catalysts, but sustainability remains to be observed.

Cheng Liang, fund manager at 33 Degrees Capital, analyzed that October will overall maintain a pattern of consolidation at the bottom with structural divergence, and the market mainline will shift from \"valuation expansion\" to \"earnings pricing.\" On rhythm, mid-to-late October will see dense third-quarter earnings disclosure, with sharp divergence between genuine growth stocks and purely thematic stocks. From late October to November, it is necessary to observe the resonance of three factors: US Treasury trends, US AI earnings reports and domestic earnings verification. A comprehensive broad rally is unlikely, and opportunities concentrate in three directions: first, verifiable AI hardware core tracks in third-quarter earnings—optical modules, high-speed PCB/CCL, liquid cooling, test instruments (VNA), ceramic substrates (aluminum nitride), MLCC powders—retaining only leaders with \"orders plus stable gross margins.\" Second, defensive allocation—high-dividend banks, coal, telecom operators, innovative drugs/CXO (ESMO data catalyst), avoiding no-order ASIC, TGV glass substrate pure options, high-position CPO small-cap stocks and the real estate chain. Third, energy sectors with certain earnings growth—power, wind-solar-storage-hydrogen and SOFC enterprises with earnings support are expected to see repair rallies.

Avoid One-Sided Extreme Positions

In a stock-game environment with existing capital, sector rotation and divergence are intensifying. What operational strategy should be adopted currently? Cheng Liang suggests that the current period is one of high-low switching of existing capital and earnings pricing. The market is neither at the start of a bear market nor at the beginning of a main upward wave. One can adhere to the tech plus energy mainline approach. On position management: 5-6 tenths base position plus 2-3 tenths flexible position plus 1-2 tenths cash, avoiding full-position bets. On structural allocation: allocate 2-3 tenths to dividend defensive sectors (coal/energy) as ballast; allocate 3 tenths to hard tech with earnings support (optical modules, PCB, liquid cooling, new materials); reserve cash to opportunistically replenish after third-quarter earnings land. On trading discipline: if the post-holiday bounce sees shrinking volume, take profits on flexible positions; immediately reduce positions in targets that fall short of third-quarter expectations; do not blindly add positions before all three tech stabilization signals appear.

Liu Yan recommends adopting a barbell-style balanced allocation strategy, maintaining neutral positions and avoiding one-sided extreme holdings. At one end, use low-valuation, high-dividend assets as a base position to hedge volatility; at the other end, allocate to growth tracks with strong earnings certainty for return elasticity, while retaining some flexible capital to gradually add on adjustments, never blindly chasing highs. Sectors should focus on high-prosperity tech growth directions and defensive assets with stable cash flow, moderately positioning in policy-catalyzed thematic opportunities. Operationally, observe the repair strength after the holiday before increasing offensive positions, and promptly optimize portfolio structure during the dense third-quarter earnings disclosure window.

Hu Mohan recommends focusing less on the index and more on structure, with balanced allocation and both offense and defense. The current tech mainline remains unchanged, but internal structural divergence requires attention. He favors semiconductor directions with domestic substitution logic but emphasizes selecting targets with high earnings certainty. Meanwhile, attention should be paid to robotics, nonferrous metals, non-bank financials, shipping, oil and gas, agriculture and husbandry, and innovative drugs, with importance attached to the systemic impact of sustained high oil prices.

Huang Huayan stated that what currently affects market trends is still the rotation between tech and consumer sectors. The tech sector adjustment has arrived but is not yet over; consumer sector absorption is also unclear, though innovative drugs and baijiu trends show initial stabilization signals. Next week's sector rotation is expected to continue. Operationally, it is recommended to reduce tech positions and increase consumer allocation as a base position. Investors already at full position should remain on the sidelines, while those with no position should wait for suitable opportunities.

\"The current market divergence is the result of macro environment, industry prosperity differences and capital risk appetite working together. This pattern is expected to continue for some time,\" Yuan Huaming suggested. During the phase where direction remains unclear, it is advisable to retain some cash to cope with volatility. AI is a long-cycle track, and the industrial trend has not changed. Tech growth remains the medium-to-long-term mainline, but internal sector divergence will persist: targets with technological barriers and solid fundamentals are expected to continue strengthening; those with elevated valuations and earnings pressure face greater adjustment pressure. Pro-cyclical varieties with rising prosperity, high-dividend assets benefiting from the global high-rate environment, and some traditional sectors that have adjusted sufficiently and may receive policy support are expected to attract phased capital attention before year-end. Market volatility and rapid sector rotation also bring structural opportunities, and investors can leverage earnings reports and policy changes to capture layout windows in oversold targets.

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