CITIC Construction Investment: Continue to be optimistic about the dual main lines of "Technology + Resources" in the long term

CITIC Construction Investment points out that after the broad-based ETF sell-off and the huge fluctuations in international gold and silver prices, market sentiment has clearly cooled, and the short-term market faces a correction pressure. However, the adjustment space for the CSI All Share Index is limited, and it is expected to stabilize before the Spring Festival, with a new upward trend expected around the festival. In terms of industry allocation, the long-term outlook remains optimistic about the “Technology + Resources” dual main lines. Short-term market style rotation is accelerating, and sectors such as technology tracks, financials, and midstream manufacturing that have previously experienced corrections are expected to perform relatively well in the short term. Industry focus areas include: power equipment (energy storage, ultra-high voltage, photovoltaics, solid-state batteries, etc.), non-bank financials, banks, AI (optical communication, storage, etc.), coal power, home appliances, automobiles, steel, and others.

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CITIC Construction Investment: Gold and Silver Fluctuations, A-Share Style Shift

After the broad-based ETF sell-off and the huge fluctuations in international gold and silver prices, market sentiment has clearly cooled, and the short-term market faces a correction pressure. However, the adjustment space for the CSI All Share Index is limited, and it is expected to stabilize before the Spring Festival, with a new upward trend expected around the festival. In terms of industry allocation, the long-term outlook remains optimistic about the “Technology + Resources” dual main lines. Short-term market style rotation is accelerating, and sectors such as technology tracks, financials, and midstream manufacturing that have previously experienced corrections are expected to perform relatively well in the short term. Industry focus areas include: power equipment (energy storage, ultra-high voltage, photovoltaics, solid-state batteries, etc.), non-bank financials, banks, AI (optical communication, storage, etc.), coal power, home appliances, automobiles, steel, and others.

Behind the huge fluctuations in gold and silver, “Weak Dollar Trading” exits profit-taking

Recently, the sharp fluctuations in international precious metals prices are due to factors such as the Federal Reserve Chair nomination breaking market dovish expectations, short-term profit-taking, leveraged capital stampedes, and the strong amplification of silver’s speculative nature. The next Fed Chair, Waller, is expected to focus on “balance sheet reduction and rate cuts” as core policies, which may lead to a steepening of the yield curve. Under this expectation, weak dollar trading exits profit-taking, but overall U.S. stock market volatility remains low. High-growth industries like AI are expected to benefit from subsequent rate cuts, and the financial sector is also expected to benefit.

February A-Share Outlook: Short-term correction pressure, spring rally not over

On January 30, due to the sharp fluctuations in international precious metals prices and recent large-scale sell-offs of broad-based ETFs in A-shares, liquidity pressure caused a significant decline in the sentiment index, signaling a right-side sell and facing the risk of falling out of the exuberance zone. Considering the seasonal effect of rising risk aversion before the Spring Festival and the decline in the sentiment index, we expect the market to face short-term sentiment cooling and index correction pressure. Based on the current market incremental funds and sentiment index components, we expect the CSI All Share Index to have limited adjustment space and to stabilize before the Spring Festival, with a new upward trend around the festival.

We remain optimistic about the continuation of the spring rally. The first quarter has relatively ample incremental funds, and as the broad-based ETF sell-off gradually ends, market incremental funds are expected to improve significantly. Additionally, recent policy benefits (new regulations on strategic investment systems) and industry catalysts (introduction of nationwide capacity electricity pricing policies, frequent highlights of AI large models) are favorable. From a seasonal perspective, February generally has a higher success rate and better profit-making effects.

Long-term adherence to the “Technology + Resources” dual main lines, with accelerated short-term style rotation

We continue to be optimistic about the “Technology + Resources” dual main lines in the long term. Short-term market style rotation is accelerating, with technology sectors having experienced prior corrections. They are expected to benefit from abundant spring funds and rising risk appetite, supported by policy dividends such as strategic investment systems, the rollout of nationwide capacity electricity pricing, and industry catalysts like AI large models. Previously lagging sectors such as finance and midstream manufacturing are also expected to rebound.

Considering industry prosperity, industry catalysts, and external influences, recent industry focus areas include: power equipment (energy storage, ultra-high voltage, photovoltaics, solid-state batteries, etc.), non-bank financials, banks, AI (optical communication, storage, etc.), coal power, home appliances, automobiles, steel, and others.

(Source: People’s Financial News)