A-Shaped Bottom Emerges in China’s A-Shares: Could a Rebound Follow Next Week?

Table of Contents

• You might want to know


• Main Topic


• Weekend market developments


• Next week’s calendar


• Key Insights Table


• Afterwards...

You might want to know

• Does the recent intraday recovery in China’s A-share market signal that a lasting bottom has formed, or could it be only a short-term rebound?


• Which factors, sectors, and upcoming events could influence market direction during the week of October 12–16?

Main Topic

China’s A-share market experienced pronounced volatility during the past trading week, which consisted of only two sessions: October 8 and October 9. Following a sustained decline that began on September 22, the market recorded its first notable intraday reversal, falling to a low before recovering. The move prompted discussion about whether a potential short-term turning point had appeared.

A sharp, V-shaped recovery is sometimes described as a “spike bottom,” but that pattern alone does not establish that a durable market bottom is in place. A lasting bottom generally requires confirmation over time, rather than a single session’s price action. Still, trading activity was markedly stronger during the two sessions, averaging 1.8 trillion yuan per day. That increase contrasted with the weak, low-volume declines seen during the pre-holiday period and gave investors a reason to watch the first full trading week of October, from October 12 to October 16, closely.

The immediate outlook is therefore conditional. If a rebound develops, investors may have an opportunity to participate more actively than they did before the holiday. If it fails to take shape, subsequent trading should provide relatively quick evidence that selling pressure remains dominant. The key distinction is between a short-term bounce and a confirmed medium-term bottom: higher volume is encouraging, but it is not conclusive on its own.

Why some analysts see grounds for cautious optimism

Several research teams have identified factors that could support an improvement in market sentiment. Founder Securities said the market had continued to adjust both before and after the holiday. The broad-market Wind All A index experienced a maximum drawdown approaching 10% over 8 trading days. On Friday, the market rebounded after testing support near the late-July low of this year and the lower edge of the wide trading range that had persisted since September last year.

Founder Securities sees three main reasons the market could be approaching a more favorable phase. First, heavier trading in broad-based exchange-traded funds (ETFs) may help ease concerns about a negative liquidity feedback loop. Investors have increasingly converged on the view that the market is in a low range for the year. As holiday-related trading effects fade, trading volume and margin financing balances may gradually return, potentially supporting a recovery in risk appetite.

Second, some domestic and international macroeconomic variables appear to be improving. The research team considers further escalation of the United States–Iran conflict before the U.S. midterm elections less likely. U.S. Treasury auctions have gone relatively well, while the worst pressures from high oil prices and bond yields may be passing. In China, policies aimed at supporting domestic demand are beginning to take effect, and there remains room for further policy support. The team also noted that China–Europe trade negotiations produced a consensus list of outcomes that was better than previously expected.

Third, the recent market decline has made share valuations more attractive relative to risk. Founder Securities said the equity risk premiums for the SSE 50, CSI 300, and Wind All A stood at the 85%, 77%, and 72% percentiles, respectively, compared with their ranges over the past 10 years. These figures indicate that the relative compensation investors receive for bearing equity risk is elevated by historical standards; they do not, by themselves, guarantee a recovery.

ETF flows are one indicator investors may monitor. Based on experience in recent years, if net inflows into broad-based ETFs continue for 4~5 trading days, the probability of a successful market bottoming process and a subsequent period of recovery may increase. Founder Securities therefore advised paying close attention to the movement of large pools of capital. The signal matters most when considered alongside price action, trading volume, and broader market participation.

Technical signals and possible trading patterns

The strategy team at Zheshang Securities also sees signs that selling pressure may have eased after a sharp decline followed by a strong rebound. In its assessment, the force of the recent sell-off has been substantially released, while buying interest may be gradually building. From a technical perspective, the main downward leg that began in mid-August may have ended. Further volatility remains possible, but the team considers a repeat of the earlier decline’s steep pace less likely.

The Shanghai Composite Index tested 3741, its low from July 20. Zheshang Securities noted that this level, together with 3674—the high associated with the “924 rally”—could help form medium-term support for the index. The ChiNext Index reached a low of 2932 during the week, exactly touching the 0.5 retracement level of the current bull market. The team said the index may fluctuate around that level as a medium-term base is rebuilt. These technical levels are reference points, not assured floors.

Dongwu Securities urged caution when interpreting the latest trading volume. Because the week contained only 2 trading days and some investors had not yet returned to work, the observed activity may not represent stable post-holiday conditions. Its baseline scenario for October is a rebound in the first half of the month followed by more sideways, differentiated trading in the latter half.

Dongwu Securities gave three reasons for that view. From early to mid-October, the market is in a window before third-quarter earnings reports become a major source of uncertainty. With fewer overseas data releases and expectations for interest-rate increases being revised down, a rebound could develop, potentially led by technology stocks recovering from recent weakness. From late October, attention may shift toward the continuity of incremental domestic policies, including those relating to property, and debate over the economy in the fourth quarter. As the third-quarter reporting period approaches, earnings results could widen differences among individual companies and sectors.

Geopolitical uncertainty could also limit a sustained rise in risk appetite. With the U.S. midterm elections approaching, developments involving Iran and other geopolitical factors may remain uncertain after the vote. In Dongwu Securities’ view, a rally may need new catalysts to extend further; after an initial recovery, the market could return to a more divided and volatile pattern.

Sector positioning and risk management

Founder Securities highlighted three areas for investors to consider. The first is a potential oversold rebound in technology. Catalysts for the sector are expected to increase in October, while the longer-term industrial trend and business conditions in artificial intelligence remain relatively firm. After the recent steep pullback, the sector’s valuation and allocation appeal may have improved. The research team recommended watching changes in public mutual fund holdings to be disclosed in October and focusing within technology on areas with the potential for price increases, volume expansion, or new technological breakthroughs.

The second area is selective positioning in “HALO” assets at lower prices. After oil prices retreat, the report points to core-resource-related non-ferrous metals and chemicals as areas for attention. The third is non-bank financial services, which may respond directly to changes in monetary policy and whose earnings and valuations may be relatively well matched. The report also views this area as potentially helpful in stabilizing the broader indices.

Zheshang Securities took a more guarded approach. It advised keeping medium-term positions restrained and waiting for a clearer reconstruction of a medium-term bottom before considering additional exposure. At the sector level, it favored areas and industries that had fallen substantially earlier, while recommending a more balanced allocation rather than concentrated bets. This approach reflects the uncertainty over whether the latest recovery will develop into a sustained move.

Weekend market developments

Several domestic policy, corporate, and international developments were highlighted over the weekend. On October 10, a representative of China’s Ministry of Human Resources and Social Security said at a press conference in the “Getting the 15th Five-Year Plan Off to a Good Start” series that China would carry out initiatives to promote employment in response to artificial intelligence. Other announced programs included the “Skills Illuminate the Future” training initiative, an employment-promotion initiative for migrant workers, an initiative to provide high-quality public employment services, and an initiative to integrate human-resources services with other sectors.

Four government departments sought public comments on measures intended to end disorder associated with “quick-build cars.” The China Securities Regulatory Commission held an expert symposium on capital markets and financial conditions to hear views and suggestions. U.S. President Donald Trump spoke by phone with Russian President Vladimir Putin, and Russia will supply diesel to the United States. Shares associated with the plague theme drew market attention, while several companies said they had no direct connection to the issue.

Luxshare Precision (立讯精密) said that it and Luxshare Tech (立讯技术) are involved in a Section 337 investigation, which remains at an early filing stage. After the National Day holiday, dividend-index funds saw a concentrated wave of restrictions on large subscriptions. According to Wind data, between October 8 and 9, 2026, a total of 25 funds across the market announced the suspension or restriction of large subscriptions. Dividend-series index funds accounted for 9 of them, or close to four-tenths, making them the main category affected in this round.

U.S. stocks rose across the board on Friday. The Dow Jones Industrial Average gained 0.83% and rose 0.93% for the week. The Nasdaq Composite advanced 0.64%, also up 0.64% for the week, while the S&P 500 added 0.59% and gained 1.15% for the week. Most major technology stocks rose, and Chinese stocks listed in the United States generally advanced. The Nasdaq Golden Dragon China Index gained 2.69%.

Next week’s calendar

The following scheduled events may shape market attention during the week of October 12–16:

• Monday, October 12: JD.com’s 2026 Singles’ Day shopping festival is scheduled for this date. The 26th China International Industry Fair will take place in Shanghai from October 12 to 16. The 47th World Congress of Vine and Wine, being held in China for the first time, will take place in Yinchuan from October 12 to 16.


• Tuesday, October 13: Youyan New Materials is scheduled to publish the first third-quarter report on the Shanghai market.


• Wednesday, October 14: China’s National Bureau of Statistics will release its latest monthly CPI and PPI reports. The 2026 Bay Area Semiconductor Expo will take place in Shenzhen from October 14 to 16, as will the 2026 Artificial Intelligence Industry Conference in Jinan.


• Thursday, October 15: The U.S. Bureau of Labor Statistics is scheduled to release September CPI data on Wednesday local time, corresponding to Thursday Beijing time. The 140th China Import and Export Fair, or Canton Fair, will be held in Guangzhou in three phases from October 15 to November 4.


• Friday, October 16: Stock index futures settlement day, which falls on the third Friday of each month. iPhone Duo pre-orders are scheduled to open at 8 p.m.

Key Insights Table

Afterwards...

The coming week may help investors determine whether the market’s latest recovery reflects a meaningful shift in supply and demand or a temporary pause in a broader adjustment. Confirmation will depend on more than index levels: sustained ETF inflows, healthier trading participation, and the ability of different sectors to hold gains would make a recovery more convincing. Conversely, renewed declines on weak volume or increasingly narrow market leadership would argue for continued caution.

Several areas merit further attention. Better tools for analyzing ETF flows and margin financing could help distinguish durable demand from short-lived trading activity. More systematic research into how monetary policy, domestic-demand measures, and property-sector policies affect corporate earnings would also improve assessments of market value. In technology, investors and policymakers alike will need to separate long-term advances in artificial intelligence from near-term enthusiasm, while examining how new tools translate into productivity, investment, and employment.

Finally, market participants should continue to evaluate how geopolitical developments, energy prices, bond yields, and trade negotiations interact with domestic conditions. A cautious, evidence-based approach—allowing price, flow, policy, and earnings signals to confirm one another—can be more useful than treating any single “spike bottom” as a definitive turning point.