Yesterday, China’s A-share market experienced a rally followed by a pullback, with the three major indices showing significant divergence. The Shanghai Composite Index posted a slight gain, while the Shenzhen Component Index and the ChiNext Index both turned negative. Market trading volume decreased, but individual stocks remained active. In terms of news, six departments including the Ministry of Industry and Information Technology jointly released the “Implementation Plan for Enhancing the Supply-Demand Matching of Consumer Goods and Further Promoting Consumption,” aiming to cultivate trillion-yuan consumer hotspots and drive supply-demand matching upgrades. JPMorgan and domestic securities firms are generally optimistic about the market outlook, predicting that by 2026, A-shares will benefit from policy dividends and earnings recovery, with the CSI 300 target level reaching 5,200 points.

Market Rally and Pullback Highlights Structural Divergence

On November 27, the three major A-share indices experienced a rally followed by a pullback. In early trading, the ChiNext Index rose by over 2% at one point, but momentum weakened in the afternoon. Ultimately, the Shanghai Composite Index rose slightly by 0.29% to 3,875.26 points, the Shenzhen Component Index fell by 0.25% to 12,875.19 points, and the ChiNext Index dropped by 0.44% to 3,031.30 points.

Market trading volume decreased significantly, with the combined turnover of the Shanghai and Shenzhen markets totaling 17,098 billion yuan, a reduction of 736 billion yuan from the previous day, reflecting increased investor caution at key levels. Industry sectors were mixed, with paper printing, batteries, consumer electronics, photovoltaic equipment, and chemical raw materials leading gains, all rising by over 1.5%. In contrast, cultural media, cement building materials, internet services, pharmaceutical commerce, and gaming sectors led declines, with some sectors falling by nearly 2%.

At the individual stock level, performance was positive, with over 2,800 stocks rising across the market, including more than 60 stocks hitting the daily limit-up. This indicates that despite index fluctuations, interest in small and mid-cap stocks remains strong.

Analysts pointed out that this trend stems from short-term profit-taking and technical pressure, but sector rotation remains healthy. High-growth sectors such as new energy and tech electronics continue to attract capital, providing market support. Overall, A-shares are demonstrating strong resilience during the year-end period, with structural opportunities continuing to emerge.

New Consumption Policies Cultivate Hotspots, Enhancing Supply-Demand Matching

Six departments including the Ministry of Industry and Information Technology and the National Development and Reform Commission recently jointly issued the “Implementation Plan for Enhancing the Supply-Demand Matching of Consumer Goods and Further Promoting Consumption.” The plan explicitly aims to cultivate “three trillion-yuan and ten hundred-billion-yuan consumer hotspots,” targeting the resolution of supply-demand mismatches and driving consumption upgrades.

At a policy briefing, it was emphasized that this initiative is based on a comprehensive assessment of consumption trends, industrial foundations, and technological changes. The trillion-yuan sectors focus on elderly products, smart connected vehicles, and consumer electronics. The market size for elderly products has grown from 2.6 trillion yuan in 2014 to 5.4 trillion yuan in 2024, with a compound annual growth rate of 7.3%. The hundred-billion-yuan hotspots cover ten areas including infant and child products, smart wearables, cosmetics, fitness equipment, and outdoor supplies.

The plan strengthens the transition to supply-demand matching by empowering the entire consumer goods industry chain with artificial intelligence. It encourages the development of home service robots, smart home appliances, and AI terminals, and supports the construction of smart home experience centers and other scenarios to address resource waste issues where “what consumers want to buy isn’t available, and what producers want to sell doesn’t find buyers.”

Data shows that the user base for generative AI has exceeded 515 million. In the first ten months of this year, consumer goods replacement programs drove sales exceeding 2.4 trillion yuan, benefiting 360 million people, highlighting the potential for policy implementation.

Analysis suggests that the diversified landscape of consumer hotspots will significantly enhance market resilience and vitality. More stimulus policies are expected by 2026, driving growth in total retail sales of consumer goods.

Institutions Bullish on Market Outlook, Focus on Growth and Consumption

Shanghai Composite Index

The Shanghai Composite Index is a major stock market index that tracks the performance of all stocks traded on the Shanghai Stock Exchange. It was launched in 1991 and serves as a key indicator of the performance and health of China’s stock market. Its history reflects the development and liberalization of China’s financial markets since the late 20th century.

Shenzhen Component Index

The Shenzhen Component Index is a major stock market index tracking the performance of leading companies listed on the Shenzhen Stock Exchange. It was launched on January 23, 1995, to provide a comprehensive benchmark for China’s dynamic and innovative enterprises, particularly in the technology and manufacturing sectors. The index reflects the growth of Shenzhen’s financial market and its role as a hub for China’s emerging industries.

ChiNext Index

The ChiNext Index is a stock index launched by the Shenzhen Stock Exchange in 2010, designed to track the performance of China’s innovative and high-growth enterprises, particularly in sectors like technology and healthcare. Often referred to as China’s “Nasdaq,” it represents the country’s focus on fostering innovation and supporting small to medium-sized companies. Its establishment marked a significant step in the development of China’s capital markets.

CSI 300

The CSI 300 is not a physical place or cultural site, but a major stock market index in China. It tracks the performance of the 300 largest and most liquid A-share stocks listed on the Shanghai and Shenzhen stock exchanges. It was launched on April 8, 2005, to provide a comprehensive benchmark for the Chinese stock market.

Ministry of Industry and Information Technology

The Ministry of Industry and Information Technology (MIIT) is a cabinet-level executive agency of the People’s Republic of China, established in 2008. It was formed by merging several former commissions and ministries to oversee China’s industrial policy, technological development, and the information technology sector. The ministry plays a central role in guiding China’s manufacturing power and its push towards technological self-sufficiency and innovation.

National Development and Reform Commission

The National Development and Reform Commission (NDRC) is a powerful macroeconomic management agency under China’s State Council. It was formed in 2003 by merging previous state planning bodies, including the iconic State Planning Commission, which was central to China’s command economy. The NDRC is now responsible for formulating and implementing national economic and social development strategies, approving major projects, and guiding economic reforms.

A-share market

The A-share market is China’s primary stock market for trading shares of mainland Chinese companies, denominated in the local currency, the renminbi (RMB). Historically, it was largely restricted to domestic investors, but it has undergone significant reforms since the early 2000s. These reforms have gradually opened the market to qualified foreign institutional investors, making it a key component of the global financial system.

Implementation Plan for Enhancing the Supply-Demand Matching of Consumer Goods and Further Promoting Consumption

This is not a place or cultural site, but a policy document. It is a Chinese government plan released in 2024 aimed at stimulating the domestic economy. The plan outlines strategies to better match the supply of goods with consumer demand and to encourage spending across various sectors.