The A-share market maintained its weak, range-bound pattern heading into the holiday period, with indices actively retreating to test key moving average support levels. While global benchmarks such as the Nasdaq Composite set fresh record highs and South Korea's KOSPI also rebounded, the influence on domestic stocks was largely confined to the opening bell, after which the market resumed its own independent trading trajectory.
On September 23, the Shanghai Composite Index opened lower and continued to slide throughout the session, with no meaningful intraday recovery as the index's center of gravity steadily declined. The Shenzhen Component Index followed a similar path, initially gapping up before selling off, breaking below its 5-day moving average mid-morning before staging a modest bounce to finish just above this short-term technical threshold. Both the ChiNext and STAR 50 indices edged higher at the open before drifting lower for the remainder of the day, although late-session buying near the 5-day moving average helped trim the losses before the close.
At the closing bell, the Shanghai Composite Index settled at 3936.52 points, down 0.39%; the Shenzhen Component Index closed at 13636.07 points, a decline of 0.64%; the ChiNext Index finished at 3379.61 points, down 0.6%; and the STAR 50 Index ended at 1660.85 points, losing 0.25%. Investor caution prevailed in the lead-up to the holiday, with combined turnover across the Shanghai, Shenzhen, and Beijing exchanges shrinking to just 1.78 trillion yuan—a substantial contraction of 370 billion yuan compared with the previous trading day.
Sector performance saw non-metallic materials, cement, electronic chemicals, and chemical fibers buck the broader downtrend with counter-trend gains. On the flip side, coal, digital media, national defense and military industries, and communications engineering led the decliners. As the market's correction deepened, the number of falling stocks expanded significantly—fewer than 1,900 stocks advanced across the entire market, the tally of limit-up stocks dropped further to just 51, while nearly 3,600 stocks closed in negative territory.
Market commentators attributed the shrinking-volume pullback to several factors: first, the pre-holiday seasonal effect prompted some investors to reduce positions and lock in profits; second, after the earlier rebound, popular sectors had accumulated considerable gains, creating natural profit-taking demand; and third, within the prevailing zero-sum trading environment, the pace of new capital inflows has slowed, accelerating sector rotation while diminishing its persistence. Overall, the reduced-volume correction suggests limited selling pressure—this appears to be a technical pullback within the broader recovery rally rather than a reversal of the underlying trend.
"The current adjustment stems largely from internal capital repositioning combined with pre-holiday seasonal effects. The shrinking volume indicates limited systemic risk and actually opens a window for bargain-hunting accumulation at lower levels, though chasing momentum blindly would be inadvisable," noted Yang Changlong, senior investment consultant at Jufu Investment Advisors.
Looking ahead, several key catalysts warrant attention. First, the upcoming high-level China-U.S. interactions this week may put topics including artificial intelligence, tariffs, and rare earths in the spotlight, with official commentary likely to influence market risk appetite. Second, geopolitical developments in the Middle East remain a critical near-term variable—if ceasefire negotiations show tangible progress, oil prices and U.S. Treasury yields could drift lower, potentially providing support to global equity markets. "On the domestic front, pre-holiday liquidity conditions, policy expectations, and the pace of capital returning after the break are also worth monitoring. With numerous external variables still in play, the market will likely digest uncertainty through structural rotation rather than broad directional moves," Yang cautioned.
Regarding post-holiday prospects, multiple brokerages have struck a constructive tone. Huatai Securities opined that as overseas disturbances gradually ease, the A-share market is poised to free itself from its current trading range, with year-end sentiment recovery still achievable. The brokerage expects a potentially sizable "meal rally" in the fourth quarter, identifying AI computing hardware and related supply chains as the preferred allocation direction, alongside sectors with visible business momentum or concrete event catalysts.
Everbright Securities similarly believes the A-share market is positioned to extend its recovery. The firm points out that with the Federal Reserve's rate decision now in the rearview mirror, any de-escalation in U.S.-Iran tensions could sustain the downward trajectory in international oil prices, thereby alleviating global inflationary pressures. This makes it increasingly likely the Fed will refrain from resuming its tightening cycle, creating a comparatively favorable external environment for equities. Additionally, a new round of China-U.S. economic and trade consultations could signal a marginal thaw in bilateral commercial relations, further bolstering market confidence and risk appetite. Combined with sustained domestic pro-growth policy efforts and the gradual release of policy dividends across multiple sectors, the market environment supports continued risk-appetite repair. On balance, with multiple positive factors converging both domestically and internationally, the market appears poised to maintain its upward momentum.