Market Overview - On January 7, A-shares saw a collective rise in the three major indices, with the Shanghai Composite Index increasing by 0.29%, approaching 4100 points. The total market turnover was approximately 1.85 trillion yuan, an increase of over 50 billion yuan compared to the previous day’s half-day trading [1]. Sector Performance - The sectors that performed well included storage chips, photoresists, rare earth permanent magnets, semiconductor equipment, non-ferrous metals, controllable nuclear fusion, high-speed copper cable connections, innovative drugs, and tourism and hotel sectors [1]. - Conversely, the sectors that experienced declines were oil and gas extraction and services, titanium dioxide, cross-border payments, pork, and military equipment [1]. Index Performance - The CSI 500 Index rose by 0.3% as of the midday close, while the CSI 300 Index saw a marginal increase of 0.03%. The ChiNext Index increased by 0.4%, and the STAR Market 50 Index rose by 1.1%. In contrast, the Hang Seng China Enterprises Index fell by 1.1% [1]. Index Valuation - The rolling P/E ratio for the CSI 300 Index was 14.5 times, placing it in the 69.1% valuation percentile since its inception in 2005 [2]. - The CSI 500 Index had a rolling P/E ratio of 17.5 times, with a valuation percentile of 76.9% since its inception in 2004 [2]. - The ChiNext Index had a rolling P/E ratio of 42.4 times, with a valuation percentile of 39.8% since its inception in 2010 [2]. - The STAR Market 50 Index had a rolling P/E ratio of 170.2 times, placing it in the 97.0% valuation percentile since its inception in 2020 [2]. Hang Seng Index - The Hang Seng China Enterprises Index, which consists of 50 large-cap and actively traded stocks listed in Hong Kong, saw a decline of 1.1%. Its rolling P/E ratio was 10.8 times, with a valuation percentile of 66.0% since its inception in 2002 [3].

Market Performance - The Hong Kong stock market continued its upward trend, experiencing high volatility throughout the day, marking three consecutive days of gains since the start of 2026 [1] - The Hang Seng Technology Index and the CSI Hong Kong Stock Connect Pharmaceutical and Health Index both rose by 1.5%, while the CSI Hong Kong Stock Connect Internet Index increased by 1.2%, and the CSI Hong Kong Stock Connect Consumer Theme Index rose by 1% [1] - The Hang Seng Stock Connect New Economy Index saw a rise of 0.7% [1] Fund Inflows - According to Wind data, the Hang Seng Technology ETF (513010) and the Hong Kong Stock Connect Internet ETF (513040) experienced net inflows of 2.14 billion yuan and 1.18 billion yuan, respectively, over the past month [1] Market Sentiment - Huatai Securities noted that the Hong Kong stock market saw gains driven by technology catalysts, achieving a "good start" on the first trading day of 2026 [1] - Current market sentiment and liquidity conditions are more favorable compared to November, increasing the likelihood of successful investments in Hong Kong stocks [1] Investment Strategy - It is recommended to continue allocating investments in technology chains with performance expectations, as there may be significant growth potential in the next quarter due to favorable liquidity conditions [1] - Additionally, a balanced allocation towards cash flow assets is advised, considering changes in driving factors and funding attributes [1]