CITIC Securities says A-share market pulled back in September as tighter
overseas liquidity and valuation digestion in prior outperformers hit prices;
growth and resource sectors retraced most, while property, pharmaceuticals and
banks outperformed from low bases. For October, overseas liquidity pressure has
eased marginally and the market enters a dense 3Q earnings disclosure window,
increasing the importance of fundamentals verification. CITIC expects 3Q tech
earnings to sustain high growth; earnings revisions also look constructive for
commodities, pharmaceuticals and non-bank financials. High-frequency indicators
show continued strength in AI hardware, firm energy prices and a mid‑term
supply‑demand case for industrial metals. After September’s correction,
valuations in some high‑cycle sectors have eased; recommended allocations
emphasize AI hardware with high earnings visibility, supply‑constrained and
profit‑improving industrial metals, coal, oil & gas and basic chemicals,
trend‑improving innovative drugs, and low‑valuation securities and insurance
stocks with earnings recovery.
