CSI 300 Falls 3.40%
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The A-share market remains in a downtrend, with major indexes broadly hitting fresh one-year lows as market risks materialize. This week, the SSE Index(000001) fell 2.56%, while the CSI 300(000300) declined 3.40%. Both reached new one-year lows and stood 7.21% and 10.87% below their respective 200-day moving averages, highlighting significant pressure on heavyweight sectors. Growth-oriented stocks suffered steeper corrections: the Shenzhen Index(399001) plunged 6.64%, and ChiNext(399006) tumbled 8.90%. Both hit fresh one-year lows, retreating 27.92% and 36.71% from their respective one-year highs. All four indexes traded below their 5-, 10-, 20-, 50-, and 200-day moving averages, underscoring a clearly weak medium-term trend. Trading volume for the major A-share indexes on the final trading day remained below their 50-day averages. Although shares changed hands during the decline, fresh capital showed limited willingness to absorb selling pressure.
Overseas markets also pulled back overall but demonstrated greater resilience. The Nasdaq Composite(0NDQC) fell 2.39%, with final-day trading volume 35.49% above its 50-day average, indicating active trading during the decline. Although it slipped below its 20-day moving average, it remained firmly above its 50- and 200-day moving averages and stood 3.64% below its one-year high. The S & P 500 Index(0S&P5) declined 0.86%, leaving it just 1.28% below its one-year high. It continued to trade above its 50- and 200-day moving averages, keeping its medium-term trend intact. The Hang Seng Index(HSI) edged down 0.1%, showing relative resilience, but remained below its 50- and 200-day moving averages, reflecting continued caution in risk appetite toward Hong Kong equities.
U.S. annual CPI inflation climbed to 3.7% in September, exceeding market expectations of 3.6% and rebounding notably from the previous reading of 3.4%. The monthly increase of 0.6% matched expectations but accelerated from 0.4% previously. PPI data were even more concerning: September PPI surged 6.3% year over year, well above the 5.3% forecast and marking the largest increase since 2022. Core PPI inflation also reached 5% year over year. Energy prices were the primary driver of this renewed inflation surge. EIA crude oil inventories plunged by 8.557 million barrels, far exceeding the expected draw of 288,000 barrels. Alongside heightened geopolitical tensions in the Middle East and U.S.–Israeli consultations on contingency plans for strikes against Iran, the diesel crisis has begun spreading widely, with the energy shock feeding through to a broader range of goods and services.
The labor market presented a mixed picture. ADP employment increased by 90,000, slightly exceeding expectations, but nonfarm payrolls rose by just 29,000, far below the forecast of 90,000 and the previous increase of 133,000. The unemployment rate edged up to 4.2%. Initial jobless claims remained low at 199,000, suggesting no clear signs of significant deterioration in the labor market. Retail sales rose 0.8% month over month, far surpassing the 0.3% forecast and demonstrating continued resilience in household spending. However, the strong headline data masked concerns about inflation eroding purchasing power. The ISM Manufacturing PMI remained in expansion territory at 54.5, indicating that economic fundamentals were still sound. Nevertheless, renewed inflationary pressures prompted Federal Reserve officials to issue hawkish signals. Several economists warned of a potential 50-basis-point rate hike in December, while UBS even forecast three rate hikes during this tightening cycle. The Fed’s Hammack explicitly noted that repeated supply shocks could alter the way people think about inflation, potentially requiring a more forceful response from the Fed. Markets currently assign approximately a 71.8% probability to rates remaining unchanged in October, but the probability of action in December is rising rapidly.
Facing domestic and external pressures, Chinese policymakers continued to signal support for stable growth. At the G20 Finance Ministers and Central Bank Governors Meeting, People’s Bank of China Governor Pan Gongsheng stated clearly that China would continue to implement a moderately accommodative monetary policy, fostering favorable monetary and financial conditions for steady economic growth and the smooth functioning of financial markets. The central bank conducted RMB 60 billion in seven-day reverse repo operations daily, keeping the interest rate unchanged at 1.40% to maintain reasonably ample liquidity. September financial data showed that lending continued to shift toward “slower growth and higher quality.” Outstanding total social financing increased 7.1% year over year, while growth in net corporate bond financing reflected a shift toward a more diversified financing structure. Direct financing channels continued to gain traction, with financial resources increasingly aligned with the economy’s development needs. Finance Minister Lan Fo’an emphasized the precise and effective implementation of a more proactive fiscal policy to sustain innovation-driven, higher-quality economic improvement. The policy focus is shifting from aggregate stimulus toward targeted measures, supporting productive investment through tangible construction progress as major projects undertaken by centrally administered state-owned enterprises accelerate. Policy-based finance is playing an increasingly important role in mobilizing investment, while technology finance has become a strategic priority for financial institutions. A financial support framework spanning product innovation and coordinated investment, lending, and insurance services is taking shape. On opening up, the China Securities Regulatory Commission proposed expanding product offerings and further opening the futures market to foreign participation. China’s inward foreign direct investment equity stock reached RMB 26.8 trillion, growing for six consecutive years and ranking second globally, underscoring the Chinese market’s continued appeal to foreign investors. Responding to the IMF’s slight adjustment to its forecast for China’s economic growth, an Economic Daily commentary published under the name Jin Guanping urged a rational assessment, emphasizing that the fundamentals supporting China’s long-term growth remain unchanged.
The G20 Finance Ministers and Central Bank Governors Meeting served as an important platform for global policy coordination. Pan Gongsheng stated at the meeting that global imbalances cannot be resolved through exchange-rate adjustments. His remarks both addressed international controversy over currency manipulation and underscored the position that global economic rebalancing requires structural reform rather than competitive currency depreciation. Despite rising expectations of Fed rate hikes, the renminbi held firm around 6.70, demonstrating considerable resilience. Japan’s economic difficulties warrant particular attention. The IMF projected that Japan’s GDP could fall to sixth place globally next year, with India overtaking it. The “lost three decades” have become intertwined with political radicalization, raising questions about the sustainability of a “militaristic” course amid an accelerating economic slide. Meanwhile, the EU summit focused on economic competitiveness and energy, seeking a balance between the green transition and industrial competitiveness. Geopolitical risks remain a major source of uncertainty for policymakers worldwide. Tensions in the Middle East are pushing up energy prices, potentially intensifying global inflationary pressures and forcing major central banks to maintain restrictive policies or even step up rate hikes. This, in turn, could increase downside risks to the global economy. The transmission chain from geopolitics to energy, inflation, and policy is reshaping the direction of global macroeconomic policymaking.
At the industry level, this week’s gains were concentrated in media, upstream energy, and defensive consumer sectors. Media-Books(G2731IG.CN) led with an 8.34% gain. Covering 25 stocks, the group’s performance indicated renewed capital inflows into low-valuation, policy-supported cultural and media assets as market risk appetite declined, with sector momentum continuing. Oil&Gas-Intl Expl&Prod(G1315IG.CN) rose 4.83%. Although the group covers only six stocks, it ranked among the top performers. Against a backdrop of international oil-price volatility and rising geopolitical risks in the Middle East, upstream energy continued to attract capital thanks to its combination of defensive characteristics and favorable business conditions, displaying notable near-term strength. Beverages-Alcoholic(G2085IG.CN) gained 3.18% and covers 37 stocks. The defensive appeal of consumer blue chips became evident during the market correction, as capital gravitated toward consumer staples and leading consumer companies offering greater certainty.
Among individual stocks, the TOP33 fell an average of 9.17% this week, with two stocks advancing and 31 declining. Leading stocks as a group came under substantial pressure, leaving little room for gains. This week’s best performer was Nanya New Material Tech(688519), which rose 0.27%. The company belongs to the Elec-Semiconductor Mfg(G3677IG.CN) and primarily designs, develops, manufactures, and sells composite materials such as copper-clad laminates and prepregs. Its key metrics included an O’Neil Score of 68, an RS Rating of 99, and an EPS Rating of 91, indicating outstanding relative price strength and earnings growth. However, its industry ranking of 68 remained outside the preferred 1–40 range, suggesting relatively limited support from the broader industry environment. Its Acc/Dis Rating of B+ reflected relatively weak recent fund flows. In the current downtrend, the sustainability of stocks with insufficient industry support and limited buying demand requires continued caution.
The current market is characterized by indexes reaching new lows and broad-based deterioration in market structure. Major broad-market indexes have broken below their medium-term moving averages and reached fresh one-year lows, with risk appetite declining markedly. A defensive approach is more appropriate, with strict control over position sizes and heightened vigilance toward stocks breaking below key moving averages or declining on expanding volume. Only limited attention and exposure should be given to resilient stocks that retain high relative strength, solid earnings fundamentals, and supportive industry conditions. Risk exposure should be increased gradually only after clear signs of market stabilization emerge.
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published on October 16, 2026