China and the United States held economic and trade consultations in Kuala Lumpur and reached a preliminary consensus on the stable settlement of a number of important economic and trade issues. On October 27, the three major A-share indexes opened higher and were all up more than 1% as of midday. The Shanghai Composite Index was at 3991.35, up 1.04%, and the Shenzhen Component Index was at 13457.28, up 1.26. %, the GEM index reported 3220.52, up 1.54%. The half-day turnover of the three cities was 1.576 billion yuan, which was 336.7 billion yuan higher than the previous trading day. More than 3,700 stocks in the market rose.
According to Xinhua News Agency, from October 25 to 26, local time, the Chinese leader of China-U.S. economic and trade, Vice Premier He Lifeng, and the U.S. leaders, U.S. Treasury Secretary Bessent and Trade Representative Greer, held Sino-U.S. economic and trade consultations in Kuala Lumpur, Malaysia. Li Chenggang, international trade negotiator and deputy minister of the Chinese Ministry of Commerce, told Chinese and foreign media reporters after the consultation that the two sides had reached a preliminary consensus on properly resolving a number of important economic and trade issues of mutual concern, and the next step would be to implement their respective domestic approval procedures.
Li Chenggang introduced that in the past two days, the Chinese and US economic and trade teams had in-depth and candid discussions and exchanges on the US Section 301 measures for China’s maritime logistics and shipbuilding industries, further extension of the reciprocal tariff suspension period, fentanyl tariffs and anti-drug cooperation, further expansion of trade, export control and other issues. They constructively discussed some options to properly handle the concerns of both parties and formed a preliminary consensus.
In terms of sector themes in early trading on October 27, steel, small metals, controllable nuclear fusion, and memory chip sectors were among the top gainers. In the steel sector, Anyang Iron and Steel, Changbao Co., Ltd., and Xinxing Cast Pipe led the gains by daily limit; in the small metal sector, Xiamen Tungsten Industry rose by daily limit, Chinatungsten High-tech, and Dongfang Tantalum Industry rose by more than 7%; in the controllable nuclear fusion sector, Antai Technology and Neway Co., Ltd.
“Entering the fourth quarter, the market style has changed to a certain extent, but from a general perspective, the current market is still in a bull market atmosphere.” Yang Delong, chief economist and fund manager of Qianhai Kaiyuan Fund, believes that the entry of OTC funds is accelerating, foreign investment banks are optimistic about Chinese assets, and the trend of residents’ savings transferring to the capital market will not change in the fourth quarter. As the center of gravity of the stock market shifts upward, more and more sectors have the opportunity to rise in rotation, which will allow more investors to obtain better returns, form a positive cycle, promote further recovery of the capital market, and at the same time promote consumption growth, effectively resolving the overcapacity situation in many industries.
On Sino-US economic and trade issues, Yang Delong believes that Sino-US trade cooperation will benefit both countries, while conflict will cause two harms. If the Sino-US trade negotiations can reach an agreement as soon as possible, it will be conducive to the development of Sino-US trade and promote Sino-US economic growth. This will be a good thing for the people of the two countries and even the people of the world.
Institutions generally believe that China-US economic and trade negotiations have made positive progress, which will help increase market risk appetite.
Industrial Securities believes that as China and the United States engage in trade negotiations and the Fed’s interest rate cuts are expected to intensify, the moment of greatest overseas disturbance may have gradually passed. China has entered a stage of intensive catalysis by positive factors such as the Fourth Plenary Session of the Central Committee of the Communist Party of China and the verification of the third quarterly economic report. Market risk appetite is expected to rise, and consensus on the main line of the technology growth boom is also expected to gather again. More importantly, the “15th Five-Year Plan” communiqué actively sets the tone to boost confidence, build consensus, and consolidate the medium- and long-term narrative of this round of positive market conditions.
West China Securities pointed out that the Fourth Plenary Session of the Central Committee of the Communist Party of China has consolidated investors’ mid- and long-term policy expectations, coupled with expectations for Sino-US interactions at the APEC summit and the Federal Reserve’s interest rate cuts, short-term risk appetite is expected to be boosted, and the “slow bull” market for A-shares will continue. Structurally, “big technology” is still the main line in the medium and long term.
