Huatai Securities A-Share Strategy: Market May See a Recovery Window After the Holiday

36Kr reports that Huatai Securities released an A-share strategy report stating that in the week before the holiday, the market continued to oscillate with shrinking volume, while structural shifts between high and low valuations persisted. Sectors such as innovative drugs, real estate, and banking performed relatively well, whereas communications and semiconductors remained under pressure from crowded positions. Overall, incremental information during the holiday was largely positive: domestically, September's manufacturing PMI returned to expansion territory, holiday consumption data showed stable volume with structural divergence, and policies on interest subsidies for first-home mortgages were implemented; internationally, equities rose while bonds lagged amid weak non-farm payrolls, pushing the Nasdaq 100 to a new high. Combining calendar effects after the long holiday, A-shares have already seen a notable adjustment before the break with stable earnings expectations, suggesting a potential surge in volume and recovery after the holiday. However, global interest rate trends driven by high oil prices continue to suppress the denominator side. The firm advises avoiding pure thematic plays and high-valuation stocks, instead rebalancing along lines of earnings, low crowding, and low volatility.