Core Viewpoint - Since 2026, the A-share market has shown significant structural differentiation, with technology and non-ferrous metal stocks leading the market, while traditional sectors like banks and liquor have lagged behind [1][3]. Index Performance - The A-share market has experienced notable index performance differences, with the CSI 500 index rising by 14.09% since 2026, achieving a monthly trading volume exceeding 11 trillion yuan, marking a historical high [4]. - The STAR 50 index has also performed well, with a cumulative increase of 12.16% since 2026, following a substantial rise of 35.92% in 2025 [4]. - The North Securities 50 index has increased by 6.64% since 2026, while the Shenzhen Component Index and Shanghai Composite Index have seen more moderate gains of 5.73% and 4.77%, respectively [5]. Sector Performance - Among sectors, the non-ferrous metals sector has led with a cumulative increase of over 30% since 2026, followed by strong performances in oil and petrochemicals, media, electronics, construction materials, steel, basic chemicals, coal, power equipment, and computers [7]. - Conversely, the banking sector has underperformed, with a cumulative decline of over 2%, along with other sectors like automotive, beauty care, transportation, non-bank financials, home appliances, defense, and food and beverage showing relative weakness [8]. Individual Stock Performance - Individual stock performance has shown even greater differentiation, with over 40 stocks doubling in value since 2026, particularly in the non-ferrous metals sector, which has nine doubling stocks [10]. - Notably, some stocks have experienced severe declines, with over 100 stocks dropping more than 30% from their peak since 2026, including several that have "halved" in value, such as *ST Aowei and *ST Changyao, with the largest drop exceeding 50% [11].

Core Viewpoint - The short-term market in A-shares is expected to continue its differentiated pattern, while a gradual convergence may occur in the medium term [1] Short-term Market Dynamics - High elasticity sectors continue to attract incremental capital due to their profitability, making it difficult for market risk appetite to decline rapidly in the short term [1] - The RMB exchange rate has shown signs of stabilization and strength, along with a relatively loose overall liquidity environment, providing support for high-elasticity assets [1] - There is a lack of substantial information impact in the fundamental signals before the Spring Festival, with high-growth sectors not facing concentrated verification pressure, allowing for potential valuation increases [1] Medium-term Outlook - The application of AI models is expected to enhance production efficiency, supporting valuations in the technology sector [1] - Global geopolitical tensions and resource security issues are providing temporary benefits to cyclical sectors such as non-ferrous metals [1] - Following the Spring Festival, the disclosure of annual and quarterly reports by listed companies will shift market pricing logic from risk appetite and valuation expansion to performance realization and profit growth [1] - As the performance verification window opens, valuation anchors are expected to realign with corporate earnings and actual growth levels, leading to a gradual convergence of previously excessive structural differentiation driven by risk appetite [1]